Australian player seeks partners for two Gambian blocks after consolidating ownership

Australia’s FAR Limited has consolidated its ownership of two offshore blocks in The Gambia following the acquisition of the remaining interest. The company is now on the lookout for partners to fund the exploration programme for these blocks.

Back in March 2022, FAR, as the operator of blocks A2 and A5, was working on progressing a farm-down of its 50 per cent working interest in these blocks, seeking a carry of a well for drilling in late 2023 or an outright sale. At the time, the firm explained that if these Gambian exploration assets are not sold in their entirety, it intended to separate them by way of a demerger into a separate stand-alone listed entity. The Australian firm’s partner in these two licenses in The Gambia was Petronas with the remaining 50 per cent stake.

In an update on Friday, FAR revealed that its wholly owned subsidiary FAR Gambia had recently acquired an additional 50 per cent interest in the blocks A2 and A5 offshore The Gambia from Petronas’ subsidiary PC Gambia, increasing the firm’s stake in these two blocks to 100 per cent. The Australian player’s next two-year license term for Block A2 and Block A5 is due to start on 1 October 2022 and as part of the acquisition, the company has negotiated with the government of The Gambia to remove the obligation to drill an exploration well during this term.

Patrick O’Connor, FAR Chairman, remarked: “FAR’s acquisition of the remaining 50 per cent of The Gambia assets and the positive discussions with the government of The Gambia on the terms for the first extension exploration period will provide FAR options to utilise its valuable exploration data to maximise value from the asset. These developments have minimal impact on FAR’s forward budget while significantly improving the chance of securing new investment.”

According to FAR, the removal of the commitment to drill an exploration well results in a significant reduction in expenditure and allows for a detailed geoscience review incorporating the results of the recent Samo-1 and Bambo-1 wells to ensure future exploration wells are located optimally. The Australian firm has opened a data room for “suitably qualified parties” to consider participation in a joint venture (JV) to undertake the geoscience review and to drill additional exploration wells.

The company expects new partners to fund the costs of the work programme and these JV partners may assume operatorship, subject to the satisfaction of certain conditions, including government approval. FAR also says that the 100 per cent interest in blocks A2 and A5 and the revised investment obligation enhance its ability to seek farm-in partners while “controlling any potential corporate action and process.”

Furthermore, the company elaborates that new laboratory analysis has positive implications for the Panthera prospect directly up-dip of the Bambo-1 well, for which full assessment of obtained information is ongoing. The firm emphasises that laboratory analyses of samples from Bambo-1 & ST1 wells offshore The Gambia are providing further insight into the occurrence of oil at the well location. FAR highlightes that new laboratory work, based on analyses of rock cuttings recovered during drilling, confirms oil at multiple levels in the well. FAR used the Stena IceMax drillship for drilling operations.

The Australian company underlines that the S390 reservoir up-dip from Bambo-1 lies within a structural closure which forms the Panthera prospect, adding that there were oil shows down dip of the Panthera closure in Samo-1 providing evidence of an oil charge at both ends of the prospect. Based on the firm’s statement, the new laboratory results provide “additional and more compelling evidence” of oil charge into Panthera including the possibility that Bambo-1 ST1 “just intersected the very edge of an oil column.”

The company claims that its latest data has significantly de-risked the Panthera prospect, which is “emerging as a strong candidate for future drilling campaigns.” In addition, further analytical work has been done on the Bambo-1 primary reservoir objective interval at the S440 and S408 levels, which are the lateral equivalents of the primary reservoirs in the Sangomar field.

The company says that the result of the laboratory analysis further supports the pre-drill model that the Sangomar oil extends into The Gambia “but the poor quality of the reservoirs within the columns means this has no direct commercial significance because the oil would be non-recoverable.”

Due to these results FAR has commissioned further laboratory analysis and a detailed rock physics study of the Bambo-1, Bambo-1ST1, Samo-1 and Jammah-1 wells to determine “how best to discriminate lithology and fluid characteristics from seismic data.”

The firm concludes that the results of the study and the further analysis currently underway will guide future exploration efforts and attract new partners into the Block A2/A5 joint venture.