FAR to Drill First Gambia Well in October

Next month, Africa-focused ASX-listed oil and gas explorer FAR expects to spud the first well off the coast of Gambia in 40 years.

Upstream reported on Thursday that the drillship Stena DrillMAX is expected to start drilling the Samo-1 prospect in October. Samo-1 will target an estimated 825 million barrels of oil across two intervals; an upper Albian reservoir and a lower Albian interval.

“We will be spudding a 35-day well around 20 October. That date will be nailed down in the next few weeks when we go through the rig acceptance process,” FAR Managing Director Catherine Norman said.

She added that FAR expects results from the well in mid-December.

FAR picked up its acreage off Gambia, which includes the A2 and A5 blocks, in February 2017 after signing a deal with US company Erin Energy to take an 80-percent operated interest.

FAR paid roughly $166,000 per percentage point to farm in and received a significant premium when it farmed out a 40% non-operated interest to Malaysian giant Petronas 11 months later.

“That shows you the amount of interest that has been generated in this particular region to be able to increase the value of that farm-in in such a short period of time,” she noted.

The farm-out deal with Petronas will see the Malaysian company fund 80 percent of the Samo-1 exploration well, up to a total gross cost of $45 million, and pay FAR a $6-million payment plus 80 percent of non-well back costs.

Following the farm-out of a 40 percent share to Petronas, FAR continues to hold a 40 percent operated stake in the A2 and A5 blocks, with Erin holding the remaining 20 percent.