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Friday, August 2, 2013
FAR Ltd. has completed its second farm-out for its acreage offshore Senegal, the Rufisque, Sangomar, and Sangomar Deep. The second farm-out was with ConocoPhillips. The latest sale allows the company to launch its high impact, two-well exploration drilling program. This program is expected to start in H1 2014.
To earn a 10% working interest in the Senegalese permits, ConocoPhillips will provide funding equivalent to a full carry through a second exploration well. The farm-in well will target the deeper water ‘fan’ play. ConocoPhillips will provide the funding to FAR via a combination of cash payments and well cost carry payments. The total funding to be paid by ConocoPhillips is expected to fund FAR’s 15 % working interest on the ‘fan’ exploration well. The ConocoPhillips farm-in well will test multiple stacked targets in the ‘fan’ play with combined unrisked prospective resources of 936 million barrels.
The ConocoPhillips deal, which is subject to government approvals, follows FAR’s previously announced farm-in agreement with Cairn Energy in March. After the conclusion of the two deals, FAR will have secured funding for the two-well campaign. FAR anticipates that after the completion of the two wells, it will have a net cash surplus from the two farm-in agreements of about $10 million. FAR retains a 15% working interest in the blocks.
MD, Cathy Norman said: “This second farm in is further significant recognition of the value of our offshore Senegal permits. ConocoPhillips brings world class financial and technical strength to our Senegal Joint Venture. It also has significant deep water development expertise in the event of a discovery. Drilling these two exploration wells, which are targeting around one billion barrels of unrisked prospective resources, will take FAR a significant step closer to evaluating the substantial exploration potential of its Senegalese acreage. Success in either of these two wells will likely have a profound impact on the value of FAR.”
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