Petroleum Africa
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Tuesday, August 28, 2018
The government of Gambia approved the assignment by FAR Gambia Ltd of a 40% interest in petroleum licenses for offshore Blocks A2 and A5 to a subsidiary of Malaysia’s state-run firm Petronas.
Under the terms of the farm-out agreement executed,Petronas will fund 80% of the exploration well costs of the Samo-1 well up to a maximum total gross cost of $45 million. In addition to the well costs, the Malaysian firm will pay FAR cash consideration of $6 million plus 80% of non-well back costs.
The proceeds are subject to reconciliation and were estimated to be A$19 million at June 30, 2018.
FAR will retain 40% of its original 80% interest.
FAR’s Managing Director Cath Norman said, “By securing the approval of The Gambian Ministry of Petroleum and Energy, FAR has achieved another milestone towards its objective of drilling the substantial oil resource potential of the highly prospective Blocks A2 and A5 in The Gambia. We again thank the Gambia Ministry of Petroleum and Energy, the Gambia National Petroleum Company (GNPC), the Government of the Gambia and our broader Gambian stakeholders and look forward to working with them to drill Gambia’s first exploration well since 1979 with our coventurer, Petronas.”
FAR has secured a contract with a subsidiary of Stena Drilling who will provide and operate the Stena DrillMAX drillship to drill the Samo-1 well in late 2018. The company has identified and mapped an additional prospect, the Bambo prospect, and continues to interpret the seismic data in this highly prospective area with a view to revealing additional prospects and leads for future drilling
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