Perth-based FAR Ltd. (formerly First Australian Resources) has received $5.5 million (Aus.) from UK firm Cairn Energy PLC in a farmout deal in its exploration permits offshore Senegal.
The money from the deal increases FAR’s cash position close to $30 million (Aus.) enabling it to participate in two planned exploration wells in its African permits this year.
The deal with Cairn is one of two farmouts announced last year, the other being with US major ConocoPhillips for a similar amount.
Two exploration wells, expected to cost a total of $200 million, will be drilled in the permits in 2014. FAR has retained 15% interest in each, but passed operatorship across to Cairn which will have 40%. ConocoPhillips will have 35% and Senegal national oil company Petrosen has the remaining 10% as a carried interest in the drilling program.
The wells will be drilled back-to-back using the dynamic positioning Transocean’s Cajun Express semisubmersible rig that has begun a multijoint venture campaign operated by Cairn off West Africa.
The first of the wells will spud before the end of March. It is targeting a shelf play with potential to hold 600 million bbl of oil.
The second well will be a deepwater fan play with a 900 million bbl potential.