Petroleum Africa
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Monday, August 28, 2017
FAR Ltd. received official confirmation that the increase in equity and amendments to the Guinea-Bissau licenses have been approved by government decree. FAR said the changes to the license terms are consistent with its strategy to focus on the shelf edge areas of the Sinapa and Esperanca licenses. The shelf areas of the Sinapa and Esperanca display similar geological setting to offshore Senegal and FAR’s enormous SNE field discovery.
Under the revised license terms negotiated by FAR and its JV partner Svenska Petroleum Exploration, FAR now has a 21.42% participating and paying interest in the permits, an increase from the 15% participating and 21.42% paying interests as previously reported. These changes reflect the fact that Petroguin will no longer have a participating interest in the JV prior to a commercial discovery. Upon making a commercial discovery, Petroguin will have a reduced participating and paying interest of 10% and FAR and Svenska will respectively have interests of 19.28% and 70.71%.
In addition, the new terms negotiated include more favorable arrangements for deep water investment including a reduction to production royalty rates payable to government. The JV has also been awarded a three-year extension to the current license periods, now ending on November 25, 2020. During these license periods, the JV will drill one exploration well on each license with a minimum expenditure commitment for each license of $3 million (gross).
These changes in the terms of the licensehave been now been approved by government decree.
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