Australian explorer FAR Ltd. has secured funds to advance a drilling program offshore Senegal in West Africa after raising $41 million (A$46.7 million) through a share placement.
With joint venture partners Cairn Energy plc, ConocoPhillips and Petrosen, FAR last week announced a “significant oil discovery” in the Senegal prospect’s FAN-1 exploration well.
Initial estimates for the well, which is located in 4,680 feet water depth and lies about 60 miles offshore in the Sangomar Deep block, range from 250 million to 2.5 billion barrels, according to Cairn.
The joint venture's sights are now set on the program's second exploration target, SNE-1, after the semisubmersible unit used to drill FAN-1 was mobilized.
FAR Managing Director Cath Norman said the discovery of oil in FAN-1, and an extended period of unscheduled maintenance, had resulted in an increase to the forecast cost of the Senegal drilling program that exceeded the company’s funding cap for both wells.
“The additional funds raised will now allow us to complete this very exciting drilling program,” Norman said in a company statement.
“The discovery of oil in FAN-1 has gone some way to increasing the chance of success in the SNE-1 well so we eagerly await the results from this next well and hope to repeat the success of FAN-1.”
To complete the raising FAR issued almost 425 million shares on the Australian Securities Exchange (ASX) at 11 cents each to institutional investors, representing an 18.5 percent discount on the company’s value prior to announcing the placement.
Following the raising, which leaves FAR with about $74.6 million (AUD 85 million) in cash, the placed shares represent 13.6 per cent of the enlarged capital of the company.
The joint venture covers three blocks offshore Senegal: Cairn Energy (a majority 40 percent share), ConocoPhillips (35 percent), FAR (15 percent) and Petrosen (10 percent). FAR is also advancing exploration ventures in Kenya, Guinea Bissau and Australia.
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