FAR Ltd., Perth, has signed a farmout agreement with Malaysia’s Petronas in which the state firm will take a 40% interest in each of FAR’s offshore Gambia permits—Blocks A2 and A5.
Petronas will fund 80% of the costs, up to a $45-million cap, of the forthcoming Samo-1 wildcat to be drilled on the A2 block later this year. Based on the deal’s completion date of Mar. 31, FAR is to be paid an estimated $13.5 million for reimbursement of back costs as well as a cash consideration. Petronas also will fund FAR’s share of non-well costs up to a maximum of $1.5 million.
FAR will retain a 40% interest in each of the permits and will remain operator through the exploration phase of the A2 and A5 licenses, including the drilling of Samo-1. Petronas has the right to become operator of any resulting development program.
Samo-1 will be the first exploration well drilled offshore Gambia since 1979. FAR says the prospect has the capacity to hold resources of 825 million bbl of oil. It has two target intervals and is on trend with FAR’s SNE oil field in neighbouring Senegal waters immediately to the north.
The farmout deal is subject to ministerial approval for the Gambian government along with joint venture consents.
FAR entered Gambia offshore permits in 2017, itself farming into 80% of the A2 and A5 blocks from African-American company Erin Energy Corp. for $5.18 million and the promise of funding Erin’s costs of the Samo well up to $8 million (OGJ Online, July 6, 2017).
