FAR has defaulted on its most recent development cash call on Phase 1 of the Sangomar/SNE development.
Under the Sangomar Joint Operating Agreement, any party that defaults on its financial obligations and cash calls have a six month rectification period, during which time it will pay LIBOR+2% on the unpaid amounts. FAR will also not be able to participate in any of the operating committee meetings or participate in any voting on JV issues.
If FAR fails to rectify on its default, it will forfeit its entire interest in Sangomar with no compensation - i.e. FAR will lose the asset and the value of it will be zero.
In the meantime, FAR is investigating a sale of a stake and will have a race against time to find a solution.
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