TOWER RESOURCES PLC The next twelve months are going to be the most exciting in the Company’s history, building up to the definitive test  of the Namibia project potential with the drilling of the first well scheduled for early in 20 1 2. As announced on 8  July 20 1 0, an independent Competent Person Report (CPR) on the Namibia venture, based on 2-D seismic data,  confirmed the world class scale and quality of the Licence and concluded that the Delta structure, currently being  prepared for drilling, has a 26% chance of finding 2.4 billion barrels of oil equivalent (“boe”) gross recoverable  resources from the most clearly defined reservoir horizon. The report also confirmed significant prospective  resources in less well defined horizons in the Delta structure and in the Alpha and Gamma structures. In  combination, the latter two leads would hold about 5 billion boe of un-risked gross recoverable resources. Such  potential represents truly exciting exploration targets. The interpretation of  3 -D seismic data has further confirmed  that potential, and an updated CPR is expected to be completed in mid-June 20 11 . Dear Shareholders  Financial Highlights and Going  C oncern  O perations  S ummary to end 2010  Namibia  While Namibia will provide the greatest excitement, a third well is also planned in Uganda which could create  significant additional shareholder value. This well appears to have a better chance of success than the first two,  based on interpretation of the cumulative evidence to date. A high resolution aero gravity gradiometry (“GGI”)  survey was completed during July 20 1 0, with final interpretation finalised in December. The interpreted data clearly  indicates an area where basin depth plunges to about 2,500 metres and this is expected to be favourable for the  generation of hydrocarbons. It also highlighted a clearly defined structural high not too far from the newly defined  kitchen. This interpretation has provided the basis for a focused seismic programme, which is about to begin. Meaningful progress with prospective farm-in partners for the Uganda Licence was delayed whilst discussions about  completion of the Heritage/Tullow transaction and the subsequent sale of assets by Tullow to Total and CNOOC  remained unresolved. To avoid serious delay to the commitment programme and to meet the budgeted cost of the  seismic programme which is due to begin shortly, the Company raised approximately £4.28 million by way of a  share placing in February 20 11 . The tax negotiation has now been sufficiently well resolved to allow development  of the substantial reserves discovered in the Albertine Graben to date to continue, and a farm in partner is now being  actively sought for the EA5 commitment well.  The Group’s loss for the year ended  31 st December 20 1 0 was $ 1 , 311 ,45 3 , an increase of $265,674 over the  corresponding period for 2009. Capital expenditure on exploration studies, drilling operations, licence management  costs and licence fees amounted to $7,966,96 1  after receiving $ 1 ,85 1 , 1 80 from farm-in partners. Cash balances at  31 December 20 1 0 totalled $ 1 ,2 13 ,428.  All operational expenditure for the Namibian project during the year was met by the Licence operator, Arcadia  Petroleum and Tower’s financial carry will continue until completion of the first well and, if this is successful, a  second well. The Group continues to operate in Uganda and is liable to meet the ongoing operating costs of its local  operating subsidiary until funding for forward operational commitments is secured. The remaining commitment is a  well which needs to be started before 27 March 20 1 2. The current strategy remains to reach agreement with third  parties to fully fund this well, which the current programme calls to be drilled before the end of 20 11 . The Company  is part way through a farm-out process coordinated by ENVOI, a consultancy specialising in identifying funding  partners for exploration programmes. Global Petroleum Plc retains, but has not yet exercised, an option under  agreed terms to become a 25% licencee and to participate in future operations. If it elects to participate in the current  seismic and the commitment well it will be liable for its share of costs incurred since completing Avivi- 1 .  In February 20 11 , and in advance of securing external funding for Uganda operations, the Company raised cash of  $6,882,745 net of costs via a share placement. This funding will enable it to meet the projected cost of the seismic  project and working capital requirements for the next  1 2 months. The Board is confident that the Uganda  commitment well can be funded within the remaining duration of the Licence term.  The seismic vessel, “Geowave Master”, arrived on location on Monday 28 June 20 1 0 to begin the  3 -D seismic  acquisition programme and completed the survey on 6 September 20 1 0. The data quality is excellent and processing  was completed early in 20 11 . 3 C HAI R MAN’ S ST A TE M E N T