KUALA LUMPUR: Oil and gas (O&G) exploration and development company FAR Ltd has signed a farm-out agreement (FOA) with Petroliam Nasional Bhd (Petronas) to assign a 40% interest in each of the highly prospective offshore petroleum licences — Blocks A2 and A5 — in Gambia.
FAR retains a 40% interest in each of the licences.
Australia-listed FAR said its wholly-owned subsidiary FAR Gambia Ltd has entered into a FOA with Petronas’ wholly-owned subsidiary PC Gambia Ltd.
In a statement yesterday, FAR said Petronas will fund 80% of total well costs of the Samo-1 exploration well up to a maximum total cost of US$45 million (RM175.95 million).
Based on a completion date of March 31, 2018, FAR is to be paid US$13.5 million cash for reimbursement of back costs and cash consideration.
Additionally, Petronas will fund FAR’s share of non-well costs up to a maximum amount of US$1.5 million.
The Blocks A2 and A5 permit area, covering 2,682 sq km, are adjacent to and on trend with FAR’s world-class SNE oil field discovery and have significant exploration potential.
FAR will remain as the operator through the exploration phase of the A2 and A5 licences including the drilling of the Samo-1 well, while Petronas has a right to become the operator for development.
The Samo-1 well is expected to be drilled in late 2018 and will be the first exploration well offshore Gambia since 1979.
The completion of the FOA is subject to ministerial approval from the Gambian government and customary joint venture consents.