Under the terms of the agreement, FAR will pay Erin Energy $5.18 million and carry $8 million of Erin Energy’s share of costs in the planned exploration well. If Erin Energy’s share of the well is less than $8 million, the balance is to be paid in cash. FAR’s share of the well’s cost is expected to be $25-30 million.
Erin Energy has held interest in the two blocks since 2012. The firm in 2015 received a 2-year extension for the blocks until Dec. 31, 2018 (OGJ Online, May 15, 2015).
FAR in March signed an area of mutual interest agreement with CNOOC UK Ltd. that covers Blocks A2 and A5 as well as permits offshore Senegal (OGJ Online, Mar. 31, 2017). The AMI, which has a 2-year duration, enables the firms to enact agreed arrangements to partner in evaluating, bidding, negotiating, and managing joint ventures on farm-in and open acreage opportunities.
FAR is currently in arbitration to resolve a joint operating agreement dispute regarding the firm’s right to preempt the sale of ConocoPhillips’ interest in three blocks off Senegal, including one containing the SNE oil discovery (OGJ Online, June 21, 2017).