FAR Gets Government Nod to Farm-out Stake to Milio in Kenya Block L6

Africa-focused oil and gas explorer FAR Ltd. (FAR) disclosed Monday that the company has received approval from the Ministry of Energy and Petroleum in Kenya for its first farm in deal on its highly prospective onshore and offshore Kenya exploration permit, Block L6, located in the Lamu basin.

Under the terms of the farm-in with Milio E&P Limited and Milio International (Milio), FAR will be fully funded through the drilling and testing of a high impact onshore exploration well in Block L6 expected to spud in 1H 2015.

FAR will also be fully funded through the acquisition, processing and interpretation of a regional onshore 621 mile (1,000 kilometer) 2D seismic survey. This is expected to confirm a number of prospects in onshore L6 as drill targets. This seismic program is expected to commence in April 2014.

FAR retains a 24 percent interest in the onshore part of Block L6. FAR also preserves its 60 percent interest in the highly prospective offshore part of Block L6 which FAR has estimated to contain substantial prospective resources. FAR is also currently in discussions with parties to farm-in to drill an offshore well in Block L6.

Block L6 is located to the north of major east coast Kenyan population centres and infrastructure. In the event the Milio funded exploration well in 2015 is a discovery, FAR plans to fast track an onshore development in order that production could contribute to Kenya’s near term growing energy requirements and supply major power generation projects planned by the Kenyan Government.

Cathy Norman, FAR Managing Director said:

“We are pleased that the Cabinet Secretary for the Ministry of Energy and Petroleum has approved our recently announced farm out agreement for Block L6, Kenya. We believe this deal, which FAR has secured funding for an onshore exploration well following a seismic survey, will evaluate the significant potential of the onshore part of Block L6 and unlock the potential of the wider Lamu basin in which FAR has a large acreage position.