The Government of The Republic of The Gambia in West Africa has approved the assignment by FAR Gambia Ltd of a 40 per cent interest in petroleum licences for offshore Blocks A2 and A5 in The Gambia to a subsidiary Malaysian oil and gas company, Petroliam Nasional Berhad (PETRONAS).
Under the terms of the farm-out agreement which was executed in February 2018, PETRONAS will fund 80 per cent of the exploration well costs of the Samo-1 well up to a maximum total gross cost of US$45.0 million. In addition to the well costs, another announcement was made this morning that PETRONAS will pay FAR cash consideration of US$6 million plus 80 per cent of non-well back costs. The proceeds are subject to reconciliation and were estimated to be A$19 million at 30 June 2018.
The blocks A2 and A5 are adjacent and resemble FAR’s SNE oil field discovery and have been said to boast ‘significant exploration potential’. The blocks cover an area of approximately 2,682 square kilometres within the rapidly emerging and prolific Mauritania-Senegal-Guinea-Bissau Conakry (MSGBC) Basin. They lie approximately 30 kilometres offshore in water depths ranging from 50 to 1,200 metres.
“By securing the approval of The Gambian Ministry of Petroleum and Energy, FAR has achieved another milestone towards its objective of drilling the substantial oil resource potential of the highly prospective Blocks A2 and A5 in The Gambia,” announced FAR’s Managing Director Cath Norman, earlier this morning.
“We again thank the Gambia Ministry of Petroleum and Energy, the Gambia National Petroleum Company (GNPC), the Government of the Gambia and our broader Gambian stakeholders and look forward to working with them to drill Gambia’s first exploration well since 1979 with our coventurer, PETRONAS,” she said.
Further to this, FAR has secured a contract with a subsidiary of Stena Drilling who will provide and operate the Stena DrillMAX drillship to drill the Samo-1 well in late 2018. It has been forecast that the Samo prospect contains prospective resources of 825 million barrels of oil.
Lastly, the Company has identified and mapped an additional prospect (Bambo) and have stated that they will continue to interpret the seismic data in this ‘highly prospective area’ with plans to revealing additional prospects and leads for future drilling in the future. More information on this project can be found here.