FAR awarded more equity in licenses offshore Guinea-Bissau

FAR Ltd., Perth, has received confirmation that the increase in equity and amendments to its Guinea-Bissau offshore licences in West Africa have been approved by government decree.

FAR Ltd., Perth, has received confirmation that the increase in equity and amendments to its Guinea-Bissau offshore licences in West Africa have been approved by government decree.

Negotiations for the changes were concluded last April with state oil company Petroguin revising the terms of the licenses for Sinapa and Esperanca. FAR will now hold 21.42% participating and paying interest in both permits, an increase from the earlier 15% participating and 21.42% paying interests.

The changes have come about because Petroguin will no longer have a participating interest in the combine prior to any commercial discovery.

Additionally, when a commercial discovery is made, Petroguin will take a reduced participating and paying interest of 10%. This will leave FAR and its combine partner Svenska Petroleum Exploration AB with 19.28% and 70.71%, respectively.

The renegotiated license terms also include more favorable arrangements for deepwater investment, including a reduction in the production royalty rates payable to the Guinea-Bissau government.

In the light of FAR’s success further north offshore Senegal with its SNE oil field discovery, the combine has decided to focus on the shelf edge areas of the Sinapa and Esperanca permits because of their similar geological setting to SNE field. The group has previously mapped the Atum prospect on the Guinea-Bissau shelf edge, which has potential to hold 470 million bbl of recoverable oil. A number of other prospects and leads have been identified in the permits.

The Guinea-Bissau government has recognized this new focus by granting a 3-year extension to the current license terms to allow more time for FAR and Svenska to evaluate the newly acquired 3D seismic data in the area. The two license will now extend until the end of November 2020.

The work obligation includes one exploration well and a minimum expenditure commitment of $3 million in each permit.

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