FAR Ltd Provides an Update on Current Drilling Program in Senegal and Future Plans in Kenya

Source Press Release
Company FAR LimitedCapricorn Energy PlcConocoPhillipsPetrosen 
Tags Exploration, Upstream Activities, Strategy - Upstream, Upstream
Date April 24, 2014

FAR Ltd has received a number of shareholder enquiries about the current drilling program in Senegal and future plans in Kenya.

FAR is currently drilling the first of two potentially high-impact exploration wells offshore Senegal, with its joint venture partners Cairn Energy of the UK, ConocoPhillips of the USA and  Petrosen the Senegalese national oil company. The well spudded last Thursday (reference: FAR ASX release 17/04/2014) and kicks off an exciting year for FAR shareholders that will see up to five exploration wells being drilled by the company.

Of these five wells, the first two are being drilled back to back offshore Senegal and funding for these two wells has been provided in the form of a carry and cash payments made by Cairn Energy and ConocoPhillips (reference: FAR ASX release 17/04/2014).

A third farm out to the Milio group of companies early in 2014 (reference: FAR ASX release 04/02/2014) resulted in FAR being fully carried through an onshore well and onshore seismic program due to commence in June 2014. The well is expected to be drilled early 2015 once a final drilling location is selected from the new seismic data. This carried program applies to the onshore portion of Block L6, Kenya where there is strong potential for discovery of gas and a near term gas to power development opportunity. FAR retains a 24% interest in the onshore part of the Block L6. In the offshore portion of Block L6 where FAR currently has a 60% interest, FAR is currently progressing a farm out initiative for drilling an offshore well. The recent Sunbird-1 discovery well drilled by the BG Group in the nearby Kenya Block 10A targeted a Miocene reef structure. The Miocene reef play extends along the coast of Kenya and through both of FAR's offshore blocks, L6 and L9. With the very encouraging Sunbird-1 well results, FAR anticipates strong industry interest in its L6 farm out opportunity.

The fifth of our planned wells is offshore Guinea Bissau where FAR has assessed significant upside potential around the existing Sinapa oil field contained in the company's licences (reference: FAR ASX release 05/02/2014). The joint venture will continue to monitor the current political climate in Guinea Bissau as an election process is currently underway. Drilling is currently scheduled to commence in March 2015. As at 31 March 2014, the company had a cash balance of $26.6 million and no corporate debt.

'FAR is in an enviable position as we commence our drilling program in Senegal. The company has two strong partners, retains a high equity in any discovery made and is well funded to meet its commitments in these wells and our forward work program, having close to $27 million in cash at bank and no corporate debt'

Success in either of these two wells offshore Senegal will be significant and open the door to a large inventory of follow on drill targets creating sizeable upside for the company and its partners. It is a fantastic milestone for the company and one that we aim to reproduce in Kenya where we are currently progressing a farm-out initiative. We expect that the success of the recent Sunbird-1 well will change the exploration landscape offshore Kenya where FAR is well positioned with a strong acreage position. It is wonderful that FAR has a deep African portfolio of opportunities for our shareholders.' Cath Norman Managing Director

Offshore Senegal, partners in the FAN-1 well currently being drilled are FAR Ltd 15%, Cairn Energy PLC 40%, ConocoPhillips 35%,  Petrosen 10%.

The FAN-1 well will test a structure with the potential to contain approximately 900 million barrels of oil (mmbbls)* with approximately 135mmbbls net to FAR* (reference: FAR ASX release of 27/2/2013). Drilling started on 17 April using the fifth generation rig, the Cajun Express.

FAN-1 will be immediately followed by a second exploration well targeting a shelf edge prospect in 1,100m of water and together the two exploration wells will test combined, unrisked, prospective resources of approximately 1.5 billion barrels* (225 mmbbls net to FAR*) with FAR retaining a 15% working interest in the blocks (reference: FAR ASX release of 27/2/2013).

Drilling FAN-1 is progressing as scheduled and is expected to take approximately two months to complete.

Source: EvaluateEnergy® ©2022 EvaluateEnergy Ltd