FAR Ltd., Perth, has signed an area of mutual interest (AMI) agreement with CNOOC UK Ltd. that covers selected permits offshore Senegal as well as FAR’s recent farm-in to blocks offshore Gambia.
The AMI, which has a 2-year duration, enables FAR and CNOOC UK to enact agreed arrangements to partner in evaluating, bidding, negotiating, and managing joint ventures on farm-in and open acreage opportunities.
FAR said the partnership combines expertise in the Mauritania-Senegal-Guinea-Bissau offshore basin of West Africa and the capabilities of an international deepwater operator.
The two companies have committed to building long-term strategic relationships with the people and governments in Senegal and Gambia.
The agreement comes close on the heels of FAR’s farm-in to an 80% working interest and operatorship in the two highly sought Blocks A2 and A5 offshore Gambia from independent Erin Energy Corp.
These blocks cover an area of 2,682 sq km in the Mauritania-Senegal-Guinea Bissau basin and are on trend and adjacent to the company’s Senegal permits. They contain large prospects that are similar to the SNE “shelf edge” play. They lie 30 km offshore in 50-1,200 m of water.
The farm-in deal requires FAR to pay an up-front fee of $5.18 million to Erin and then fund Erin as much as $8 million via an exploration well scheduled for drilling late in 2018. If Erin’s share of the well cost is less than $8 million, the balance will be paid in cash. Erin will retain 20% working interest in the permits.
Prior to that this year, the two companies plan to reprocess and interpret existing 3D seismic to provide mature prospects for the drilling program.