Billion Barrel Oil Potential in FAR’s Offshore Guinea Bissau Blocks

FAR, an independent oil and gas explorer with high impact assets in East and West Africa, has completed detailed geotechnical studies and assessed significant hydrocarbon resource potential in its Guinea Bissau 3 blocks offshore, Sinapa Block 2 and Esperanca Blocks 4A/5A in West Africa. FAR’s hydrocarbon resources assessment is unaudited.

The existing East Sinapa oil discovery is estimated to contain Contingent Resources of 13.4 million barrels of oil (unrisked, 2C, 100% basis), with 2.0 net to FAR. East Sinapa is also estimated to contain Prospective Resources of 7.5 million barrels of oil (unrisked, Best Estimate, 100% basis) with 1.1 million net to FAR. The Sinapa-2 discovery well drilled by Premier in 2004 encountered 124 metres of gross oil column with further oil encountered updip by a side track well.

The West Sinapa prospect which is expected to be drilled by the joint venture in late 2014 is estimated to contain Prospective Resources of 64.7 million barrels of oil (unrisked, Best Estimate, 100% basis) with 9.7 million net to FAR. The prospect is assessed to have significant upside with 251.7 million barrels of oil (unrisked, High Estimate, 100% basis) and 37.8 million barrels net to FAR.

A further 14 prospects and leads have been identified in the permits. The total combined Prospective Resources for the 3 blocks are estimated to contain 954 million barrels of oil (unrisked, Best Estimates, 100% basis) with 143 million net to FAR. An immediate follow up well is planned in 2014 in the event of success on the West Sinapa well.

FAR’s Managing Director, Catherine Norman, said: “FAR’s hydrocarbon resource assessment confirms the billion barrel oil potential of FAR’s offshore Guinea Bissau permits. The two existing discoveries in the permits provide clear evidence of a functioning hydrocarbon system thus the chance of exploration success in our first well in the permits, planned for late 2014, is relatively high. With the permits being located in benign shallow waters, the costs of exploration and development are commercially attractive. Our Guinea-Bissau permits are an emerging strong component of our diversified African exploration portfolio and have the potential to add significant value for our shareholders.”

FAR’s Guinea-Bissau Blocks

FAR holds a 15% participating interest and 21.43% paying interest in Sinapa Block 2 and Esperanca Blocks 4A/5A in offshore Guinea-Bissau. Petroguin, the National Oil Company, has a 30% participating interest which is non-paying during the exploration phase. Svenska Petroleum Exploration Guinea Bissau A.B. (“Svenska”) holds the remaining participating interest and is Operator of the permits. The Block 2 joint venture is planning to drill a well in late 2014.

East Sinapa

The East Sinapa discovery was made by Premier in 2004 with the drilling of Sinapa-2 well. The well intersected a salt related structure with a gross oil column of 124 metres (measured depth), and oil was also encountered updip by a sidetrack well. A Competent Persons Report prepared by Synergy in 2012 made a probabilistic assessment of the recoverable hydrocarbon volume intersected by these wells and assessed Contingent Resources of 13.4 million barrels of oil (unrisked 2C, 100% basis) with 2.0 million net to FAR. Additional potential was also recognised by Synergy in deeper sands which were water bearing in the wells, but were assessed to have the potential to contain trapped oil in up dip locations against the salt dome.

Since then, 3D seismic was acquired over a large portion of the acreage including the East Sinapa discovery. The results of this did not materially impact on the Synergy assessment of Contingent Resources.

West Sinapa

The West Sinapa prospect is a salt related feature adjacent to the East Sinapa discovery. In 2010 a 1,640 km2 3D seismic survey was acquired over a large portion of the acreage including the West Sinapa prospect. Svenska received the processed data in December 2012 and following preliminary interpretative work, the data was provided to FAR in August 2013. FAR has since completed a detailed interpretation of the processed 3D data.

The modern 3D seismic and geological data indicates that the reservoir at West Sinapa and other prospects may be greatly improved over that of the Sinapa-2 well.

The East Sinapa discovery and the West Sinapa prospect are sufficiently close such that, should drilling on West Sinapa result in discovery of oil, both features could conceivably be developed using a single production facility. The combined Contingent and Prospective Resource potential of the two features is estimated by FAR to be 85.6 million barrels of oil (unrisked, 2C and Best Estimate, 100% basis) with an upside potential of 324.8 million barrels (unrisked, 3C and High Estimate, 100% basis).

Other Prospects and Leads

In addition to the Sinapa-2 discovery well, a significant oil column was encountered in PGO 3 in Block 2 (drilled by Exxon in 1969) which tested a tilted fault trap. In its interpretation of the modern 3D seismic data, FAR has assimilated existing well data in the vicinity of its Guinea-Bissau permits including the Sinapa-2 and PGO 3 discoveries, earlier 2D seismic data acquired over the permits, geotechnical analysis prepared by Premier and the current Operator, and FAR’s extensive regional geotechnical regional database including data and analysis from its other neighbouring permits in AGC and Senegal.

Mapping of the modern 3D seismic data has resulted in a number of analogous and potentially larger prospects being identified; both salt related features and tilted fault traps. A conclusion of significance from FAR’s assessment is that the large Atum structure identified from 3D data is considered to be analogous to the prospective shelf edge structures that FAR has identified in its Senegal acreage, one of which will be drilled in early 2014. Atum has a prospective resource potential of 471.7 million barrels (unrisked, Best Estimate, 100% basis). A number of salt related prospects have also been identified, including the North Solha prospect, which have the potential to be tied back to a future production facility at Sinapa, should that eventuate.

Combined Prospective Resources for the Sinapa Block 2 lease and the Esperanca Blocks 4A/5A lease have been assessed at 954 million barrels of oil (un-risked, Best Estimate, 100% basis).

[mappress]

Press Release, February 05, 2014