On 10 June, FAR Ltd (ASX:FAR, “FAR”) advised that Cairn (Cairn Energy plc), the Operator of the Senegal Joint
Venture had modified the Senegal drilling programme in order to incorporate essential maintenance.
Since then, Cairn has advised FAR that maintenance work is expected to be completed soon to allow drilling
operations on FAN-1 to resume. Drilling to date on FAN-1 has reached a depth of approximately 3000 metres
and is above the first reservoir objective. The plan remains to drill to total depth of 5,300m TVD (total vertical
depth). The second Senegal well, SNE-1 is currently suspended and can be re-entered when required. The well
has been drilled to a depth of 1,907m TVD and is planned to drill to a total depth of 3,292m TVD.
Based on the above mentioned amended drilling program, FAR anticipates there will be an increase to the
budgeted Senegal offshore drilling campaign well costs. Currently FAR estimates that it could be required to
contribute approximately A$24.2M (US$22.5M) to fund its share of costs of the drilling program. To date, FAR
has received cash payments totalling A$22.2M (US$20.2M) from its farm out deals with Cairn and
ConocoPhillips. FAR has a current cash position as at 19 June 2014 of A$42.9M (unaudited).
Cath Norman, MD comments,
“It is disappointing to have suffered a significant delay to drilling, but pleasingly
once the current maintenance program is completed, we should reach our first target zone in a matter of days,
not weeks. FAR completed two farm-out deals with Cairn and ConocoPhillips a year ago and has secured
significant funding for this 2 well Senegal drilling program that many in the international oil and gas industry
are keenly watching. We are keen to see drilling resume as soon as possible.”
The FAN-1 well will test a stacked fan structure with the potential to contain approximately 900 million barrels
of oil (mmbbls)* with approximately 135mmbbls net to FAR* and will be followed immediately in a back-toback
drilling program with the SNE-1 well to be drilled on the shelf targeting approximately 600 mmbbls of oil*
with approximately 75 mmbbls net to FAR*
(reference: FAR ASX release of 27/2/2013).
Drilling commenced on 17 April for the exploration well, FAN-1, offshore Senegal in which FAR holds a 15%
Working Interest, Cairn 40% WI, ConocoPhillips 35% WI and, Petrosen 10% (fully carried))
(reference: FAR ASX
release 17/4/2014)
.
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