Petroleum Africa
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Monday, June 3, 2013
Ministerial approval has been handed down for a FAR Ltd./Cairn Energy farm in agreement in Senegal. Under the agreement Cairn is to farm-in on FAR’s three Senegalese blocks; the Rufisque, the Sangomar, and the Sangomar Deep. Under the terms of the farm-in agreement, executed in March 2013, Cairn will fully fund 100% of the costs of an exploration well and testing to an investment cap of $80 million.
As part of the agreement, Cairn will pay FAR $9.8 million for past costs incurred on the block of which $4.8 million is now due following the receipt of ministerial approval. Cairn acquires a 65% working interest with FAR retaining a 25% interest and Petrosen a 10% interest.
The proposed well on prospect L will target Albian and Aptian shelf edge objectives. Cairn estimates that the dual objectives of the L Prospect have respectively unrisked mean prospective resources of 256 and 182 million barrels of oil on a 100% basis. Cairn has secured a long term contract with Transocean for the Cajun Express for its multi-well frontier exploration program in Senegal, Morocco and potentially other areas. The farm in exploration well in Senegal is currently scheduled for early-2014.
In addition, FAR and Cairn will enter into an Area of Mutual Interest agreement (AMI) to work together to evaluate and consider applying jointly for exploration opportunities offshore Senegal.
FAR’s Managing Director Cath Norman said: “By securing the prompt approval of the Senegalese Minister for the Cairn farm-in agreement, FAR has achieved another milestone towards its ambition of drilling the substantial oil resource potential of these highly prospective offshore blocks. FAR has been active in Senegal, one of Africa’s most politically and economically stable countries, since 2008. This experience has been critical in securing this approval and will enable FAR to play an active role supporting Cairn as operator. Cairn remains on schedule to drill an exploration well in early 2014.”
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