Gambia approves FAR's 80 per cent stake in offshore blocks

far imageIndependent, Africa-focused, Australian oil and gas company, FAR has acquired an 80 per cent working interest and 'Operatorship' in Gambia's highly prospective offshore blocks A2 and A5 from US and South African-listed oil independent ERIN Energy

FAR will fund ERIN through an exploration well expected to be drilled late 2018.

The acquisition is a significant expansion of FAR’s exploration portfolio in the rapidly emerging offshore Mauritania-Senegal-Guinea-Bissau Basin in West Africa.

Blocks A2 and A5 are located adjacent to FAR’s Senegal blocks and world class SNE field, covering an area of around 2,682 sq km and lying approximately 30km offshore in water depths ranging from 50 to 1,200m.  In combination, the blocks are estimated to potentially contain prospective resources of more than one billion barrels of oil. From 1,504 sq km of modern 3D seismic data acquired in the blocks, FAR has identified large prospects similar to the 'shelf edge' plays FAR is targeting in Senegal. FAR has mapped three potentially drillable prospects and leads.

“Our discoveries immediately to the north in offshore Senegal provide significant encouragement for the future discovery of oil and gas in Blocks A2 and A5 in Gambia. The significant prospectivity that we have identified in Blocks A2 and A5 are analogous play types to those successfully drilled by FAR in Senegal providing high potential to create value for both the people of Gambia and FAR shareholders," said FAR's Managing Director Cath Norman.

Under the terms of the farm-in agreement, FAR will make an upfront payment of US$5.18mn and fund up to US$8mn of ERIN’s share of the cost of an exploration well. If ERIN’s share of the exploration well costs is less than US$8mn then the balance is to be paid in cash. FAR’s share of the cost of the exploration well is expected to be around US$25mn to US$30mn.

FAR and ERIN expect to undertake 3D seismic reprocessing and interpretation during 2017 in order to mature prospects for drilling in late 2018.

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