Petroleum Africa
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Tuesday, February 27, 2018
FAR Ltd. signed a farm-out agreement (FOA) with a subsidiary of Petroliam Nasional Berhad (Petronas) to assign a 40% interest in each of the highly prospective offshore petroleum licenses, Blocks A2 and A5, in Gambia. FAR is to retain a 40% interest in each of the licenses.
Petronas will fund 80% of total costs of the Samo-1 exploration well up to a maximum total cost of $45.0 million. Based on a completion date of March 31, FAR is to be paid estimated cash of $13.5 million for reimbursement of back costs and cash consideration. In addition to this, Petronas will fund FAR’s share of non-well costs up to a maximum amount of $1.5 million.
FAR will remain operator through the exploration phase of the A2/A5 licenses, including the drilling of the Samo-1 well, and Petronas has a right to become the operator for development.
The Samo-1 well is expected to be drilled in late 2018 and will be the first exploration well offshore The Gambia since 1979. FAR estimates the Samo Prospect contains prospective resources of 825 million barrels of oil.
Completion of the FOA is subject to Ministerial approval from the government of Gambia and customary JV consents.
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