Ophir Energy plc announced Monday that it has entered into a farm-out agreement with Kosmos Energy for the EG-24 exploration license in Equatorial Guinea.
Under the terms of the agreement, Kosmos will acquire a 40 percent non-operated interest in Block EG-24. In consideration Kosmos will fully carry Ophir for the cost of a block-wide 3D seismic survey during the first exploration period of the license.
Kosmos will also partially carry Ophir for the cost of a well, if the partners subsequently elect to drill a well in the second period of the license, and the company will also pay its pro-rata share of past costs.
“Kosmos is a logical partner for us in EG-24 as its team have considerable prior experience of the Rio Muni Basin,” Nick Cooper, Ophir Energy CEO, said in a company statement.
“The farm-out reduces Ophir’s risk capital commitment and increases our monetization options in line with our disciplined exploration strategy,” he added.
Completion of the transaction is conditional on approval by the government of Equatorial Guinea.