significance of shell agreement

Hindsight is a marvelous thing so looking back on Hartleys May 2009 report regarding FAR The following excerpt signifies the impotantance of the Shell agreement to FAR, moreover they estimate that the decision on whether or not to drill will occur around mid July .....(seems the decision has already been made as noted in the quartley july 26th), also a decision to enter the drilling phase is due in late September 2009....(Extension expiry Nov 2009 )
looks like we may get the aggreement with SHELL first then later in September the drilling schedule annoucement...


Whilst Shell has not yet committed to drilling at FAR’s acreage, the decision is very significant as it marks the entry of Shell into Senegal. Decisions to enter into new countries are not undertaken lightly by the super majors, as a lot of work is required in relation to risk management (political, fiscal, regulatory, exploration potential).The implication is that Shell must believe that there is a good chance of drilling.

Five core holes were drilled as part of the Deep-Sea Drilling Program (“DSDP”) in 1975, with the DSDP 367 well, off the coast of Senegal, encountering organically rich, black shales. Further geological interpretation indicates that this “source rock” has been exposed to conditions necessary for generation of hydrocarbons. It is also considered that migration paths, timing and reservoir deposition are all ideal for oil accumulations.
Additionally, the seismic analysis by FAR revealed anomalies that could be indicative of hydrocarbons.

Whilst risk remains, work done to date has mitigated this as much as is possible. CSEM Last Hurdle to Drilling CSEM uses electromagnetic waves to measure resistivity in underground reservoirs, with hydrocarbons having a higher resistance reading than water.

A 2004 Wall Street Journal article credited CSEM with contributing to Exxon Mobil’s remarkable run of 13 out of 13 discovery wells, offshore Angola. Based on information currently available, we view the potential for positive results from the CSEM survey as medium risk