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Drilling commences at FAN-1 well offshore Senegal

MELBOURNE, Australia -- Drilling has commenced on the offshore exploration well FAN-1 offshore Senegal in which FAR holds a 15% interest (Cairn Energy - 40%, ConocoPhillips - 35%, Petrosen - 10%).

The well will test a stacked fan structure with the potential to contain approximately 900 MMbbl with approximately 135 MMbbl net to FAR.

The well will be drilled using the fifth generation rig, the Cajun Express, which arrived on site on April 12, 2014.

FAN-1 is the first exploration well in a two well programme, offshore Senegal with the wells to be drilled back to back. The first well will be located on the North Fan prospect in 1,500m water depth. This well will be immediately followed by a second exploration well targeting a shelf edge prospect in 1,100m of water.

These will be the first deep water (>1,000m) wells drilled in Senegalese waters and the first offshore wells to be drilled for over 20 years. The two exploration wells will test combined prospective resources of approximately 1.5 Bbbl of unrisked prospective resources (225 MMbbl net to FAR) and FAR retains a 15% working interest in the blocks.

In accordance with the terms of farm out deals completed with Capricorn Senegal (a 100% subsidiary of Cairn) and ConocoPhillips, FAR has successfully secured its share of funding for these two exploration wells. Based on current well cost estimates, the carry funding and cash payments that FAR has or will receive under the farm out agreements are expected to be in excess of FAR’s share of the combined well costs for the two wells.

Cath Norman, FAR Managing Director, commented, "Our shareholders and the FAR team have been eagerly awaiting the spud of this first Senegalese well and I am delighted to make this announcement. We have high hopes for these two wells which have the potential to be company makers for FAR. The next year is going to be very exciting for our company with five potentially high-impact wells to be drilled in our West and East African exploration permits."

"Of course exploration has its risks but we are confident that FAR can maximise the value from these two exploration wells. Success in either of these wells opens the door to a large play fairway of follow on drill targets which are very significant for FAR."

The FAN-1 well is a pure exploration well and, even if successful, will not be completed as a commercial production well. In the event of a success, the JV may decide to conduct further drilling and evaluation activities.

As FAR is not the operator of the Senegal wells the information flow it receives is dependent on reports provided by the operator Capricorn Senegal. Operations on the FAN-1 well are expected to last approximately two months, and FAR will release reports in collaboration with the JV partners.

04/18/2014

 

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