On 26th February, FAR announced that it had agreed to farm-out a 40% interest in Blocks A2 and A5 in The Gambia to Petronas. FAR will retain 40% and operatorship; the remaining 20% is held by Erin Energy – FAR farmed in to the blocks in March 2017 in return for upfront payment of USD5.2 million and FAR funding an exploration well (to be drilled in 2018) up to USD8 million.
Under the deal, Petronas will fund 80% of the Samo-1 exploration well up to USD45 million with the option to take on operatorship for the development. Petronas will also pay USD6 million on closing of the transaction, well back costs of USD6.4 million and non-well back costs of USD1.1 million. The well is planned to be drilled in late 2018 targeting unrisked prospective resources of 825mmbbl.
These are highly exciting blocks, lying to the south of the large SNE and FAN discoveries in Senegal and presents an opportunity to potentially capture the successful trend to date along the coast of West Africa. FAR has completed detailed geotechnical studies and from 3D seismic, FAR has identified large prospects similar to the fields that FAR has participated in in Senegal. FAR has mapped two drillable prospects, Samo and Mambo with further leads identified on the block.
The entry of Petronas comes a year after FAR attracted another major NOC into the basin – in March 2017, FAR and CNOOC entered into an Area of Mutual Interest (“AMI”) agreement with CNOOC with the two companies agreeing to partner in evaluation, bidding and negotiating farm-ins and licences across Senegal and The Gambia. The AMI lasts for a period of two years.
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