FAR farms out Gambia stake to Petronas

Australian oil and gas explorer FAR Limited has agreed to farm-out a 40 per cent interest in blocks A2 and A5 of its The Gambia oil play to Malaysian oil producer Petronas. Petronas will then fund 80 per cent of the total well costs of the Samo-1 exploration well up to a maximum cost of $US45 million. FAR will also be paid an estimated cash cost of $US13.5M as reimbursement and up to $US1.5M to fund its share of non-well costs. FAR will remain the operator throughout the exploration phase of the A2/A5 licences, including the drilling of the Samo-1 well, with Petronas given the right to become the operator for the development phase. Samo-1 is expected to be drilled later this year and will be the first exploration well offshore The Gambia since 1979, with estimated resources of 825 million barrels of oil. “This farm-out deal with Petronas is further recognition of the value of our Gambian licences and FAR’S status as a partner of choice in the Mautirania-senegal-guinea-bissau-canakry Basin,” FAR managing director Cath Norman said. “FAR has built an enviable position in the basin and we look forward to drilling the Samo1 well later this year.”