FAR Updates on Offshore Senegal Exploration Activities
Following the completion of a CSEM Data Acquisition and Geophysical Evaluation Program over part of the License Area, Shell has provided a General Summary of the results. The study focused only on the three deepwater fan systems and not all prospects within the License Area. Whilst resistive EM anomalies were identified within the Survey Area, these did not correlate in the case of the Northern and Central fans and in the case of the Southern and most prospective fan the anomaly was seen but is complex and therefore inconclusive.
A number of factors influence the findings including the presence of highly resistive carbonates and the lack of nearby well control for calibration purposes. CSEM is not a definitive exploration tool in many cases. FAR is currently reviewing the Study and may undertake further work involving independent contractors specializing in the field of CSEM.
FAR retains rights to the raw CSEM data, the processed data and interpreted report. FAR retains full authority to use the technical report and CSEM data for all purposes including the purpose of seeking an alternative farm-in partner.
PAYMENT RECEIVED UNDER SHELL AGREEMENT
FAR confirms that payment of US $3.0million has now been received under the Shell Agreement with a further US $500,000 due shortly.
FAR has lodged an application with the Senegalese Minister for Energy and Biofuels for a one year extension to the current term which expires on November 22, 2009. The application has the full support of Petrosen, the National Oil Company. FAR retains its 90 percent interest in the Licenses and Petrosen holds the remaining 10 percent.
FAR has commenced discussions with other potential farm-in partners now that restrictions under the Shell Agreement have been lifted. FAR has received a number of unsolicited approaches and these are in the process of being followed up. As was the case in the previous farm-out round this process may take several months while companies undertake technical due diligence. Due to the commercially sensitive nature of the farm-out process FAR will not make any public release until such time as a binding agreement, if any, has been reached.
FAR has accepted an invitation to deliver a paper at the 2010 AAPG Meeting in New Orleans on Evolving Plays within the Senegal portion of the Central Atlantic Margin. The paper will be delivered by Dr Igor Effimoff representing FAR and Louise Martin from Hunt Oil.
Commenting on the announcement, FAR's Executive Chairman Michael Evans said, "Our ability to attract partners and the potential of the License Area has already been demonstrated by our introduction of Shell to Senegal. We have now commenced dialogue with other interested parties with the objective of securing drilling partners. Our strong balance sheet, large interest in the Licenses (90%) and Operator status afford FAR considerable leverage and room to negotiate favorable terms."
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