Lukoil informed FAR Ltd., Melbourne, that its $220 million (Aus.) conditional proposal for all the FAR shares at 2.2 cents (Aus.) cash per share will not be firmed into a legally binding offer.
In response, FAR said it will hold a shareholders meeting on Apr. 15 to consider and vote on the sale of its 13.67% interest in the Sangomar oil development offshore Senegal to joint venture participant and project operator Woodside Petroleum.
The company added that an earlier non-binding and tentative approach from Remus Horizons PCC has also not been firmed into a definite proposal. FAR’s shares last traded in September 2020.
FAR, instrumental in the Sangomar discovery, has been severely impacted by the fall in world oil prices and the COVID-19 pandemic and can no longer participate in the development program.
The company is currently in default on its joint venture payments and now supports the sale of its interest to Woodside so that it can resume trading on the Australian Stock Exchange, rejuvenate the company, and concentrate on its remaining West African exploration program offshore Gambia.
Woodside is keen to consolidate its position in the offshore Senegal joint venture after it pre-empted Lukoil’s US$400 million bid for Cairn Energy’s 40% interest. Its move to take the FAR stake also comes on the back of a pre-emption of FAR’s sale of the Sangomar asset to ONGC of India.
Woodside has offered US$45 million for the interest which, if approved by FAR shareholders, will see Woodside’s stake in Sangomar increase to 82%. Woodside intends to sell down that interest to eventually hold between 40-50%.
Development work on the US$4.2 billion project began early 2020. The first phase is due on stream in 2023 through a floating production, storage, and offtake facility.