FAR Limited acquires additional 10% stake in Gambian Oil blocks
FAR Limited, an independent Africa focused Australian oil and gas exploration and development company has obtained an additional ten percent equity in the highly prospective multi-billion barrel potential oil blocks A2 and A5 offshore The Gambia. The additional 10 percent gives FAR Ltd a 50% stage in the oil blocks effective 1st October 2019.
The announcement was made in a Media Release on Tuesday, 1st October 2019. FAR Limited said in the release:
“ FAR Limited (ASX: FAR) has acquired an additional 10% interest in the highly prospective offshore Blocks A2 and A5 offshore The Republic of The Gambia, giving FAR a 50% working interest and the Company retains Operatorship. The interest is held in the FAR subsidiary, FAR Gambia Ltd. The Government of The Gambia (“GOTG”) has issued new Licences to the Joint Venture in respect of the A2 and A5 Blocks, incorporating updates to the Licence terms. Under the new Licences, FAR Gambia Ltd and PC Gambia Ltd (a subsidiary of Petroliam Nasional Berhad, “PETRONAS”) each has a 50% participating and paying interest. The key terms of the new Licences are:
• Three-year Initial Exploration Period, commencing immediately, plus two optional extension periods of two years each
• A commitment to drill one well in the first two years in either Block and to acquire, process and interpret 450km2 of 3D seismic in the first three years
• Signature bonuses of US$4.5m for the two Licences (US$2.25m net to FAR)
• Effective from 1 October 2019”
The acquisition of the additional ten percent in the A2 and A5 offshore Gambia blocks is possibly influenced by the “Multi-billion barrel potential on trend with SNE field in Senegal”
The release continued: “ FAR has conducted extensive geotechnical studies on the SAMO-1 well data, which has led to the identification of additional target intervals to those mapped prior to drilling. Work is on-going to map and quantify the resulting prospects, and updates on the prospects and their resource potential will be made when this work has been completed. A 3D seismic survey is planned for late 2019 to further delineate some of the identified prospects. A well is planned to be drilled in 2020. The Blocks A2 and A5 Licence areas, covering 2,682km2 , are adjacent to and on trend with FAR’s world class SNE oil field discovery which is moving toward development and first oil in 2022.”
In October 2018, FAR Ltd drilled their first exploration well in Sammo-1 of the block A2 where they hold an 80% working interest, the first drilling of a 3240m area revealed water, instead of prospects of the anticipated 825 million barrels of oil in the blocks A2 and A5. FAR Ltd’s Managing Director Cath Norman said of the outcome:
“The result in the Samo-1 well is not in line with our pre-drill expectations, however it is providing an abundance of new subsurface information that will help us understand the geological play along the shelf edge – an area which remains grossly underexplored. The FAR team has identified a portfolio of prospects and leads in the A2 and A5 permits and the data from Samo-1 will be used to further mature and derisk these for future drilling. Drilling the first well offshore Gambia for 40 years has drawn attention to this well and the result is a reminder of the risks we face in our business. We are pleased to receive a six-month extension to the licence, which will allow the JV to formulate and move on with plans to drill next year, after integrating the results from Samo-1 into the regional geological model. I would like to express my appreciation to the drilling operations teams in the safe and efficient delivery of our first well in The Gambia”
The Gambia government extended FAR Limited’s licence to June 2019 to allow the company to analyse the data from the Samo-1 failed drill. The acquisition of a further 10 percent of the oil blocks may signal significant prospect for the oil blocks.
Gambians would still be very hopeful and optimistic that an estimated 1 billion barrels of oil offshore Gambia will help transform the tiny West African country into a more prosperous and developed country of the oil gains are properly utilized, in light of the further 10 percent acquisition of the oil blocks.