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FAR targets investment decision for SNE Senegal oil project this year

A positive investment decision on the oil project offshore Senegal later this year could lead to first oil by 2022.
Offshore acreage
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FAR’s core business is oil & gas exploration and discovery
  • The SNE field offshore Senegal has 5 billion barrels of oil in place
  • FAR has development plans for 500 million of those barrels
  • It hopes to make a final investment decision about the September quarter of 2019
  • First oil would be produced about 2022

What does FAR do?

FAR Ltd (ASX:FAR) (FRA:FA6) (OTCMKTS:FARYF) is an Africa-focused oil & gas exploration and development company. It holds assets off Senegal and The Gambia, making it a large acreage holder in the emerging Mauritania, Senegal, Guinea-Bissau, Conakry (MSGBC) Basin.

The company started in 1984 as First Australian Resources NL and is run by managing director Cath Norman, a geophysicist with 33 years of industry experience.

Norman is an experienced managing director and has led a number of companies over the past 26 years in the energy, geoscience and surveying space. She previously headed up Flow Energy Limited and Gippsland Offshore Petroleum Ltd as a managing director.

What does FAR own?

Two key assets are the world-class FAN-1 and SNE-1 discoveries off Senegal made in 2014 and at the time the latter was considered a landmark discovery.

The two wells were the first exploration wells to be drilled offshore Senegal for more than 20 years and the first wells to be drilled in water deeper than 500 metres.

A series of subsequent SNE oilfield appraisal wells have taken the number of holes drilled to 11.

Discoveries such as SNE-North and FAN-South have added value to the project and support a case for hub development at SNE.

The field has 5 billion barrels of oil in place, with the company having plans for a development to extract 500 million of those barrels.

A final investment decision is pencilled in for the September quarter of 2019.

If the company opts to develop the oilfield asset, FAR would hope to achieve first oil at SNE by 2022.

What has FAR achieved in the past year?

FAR’s corporate strategy is to place strong focus on value generation through oil & gas discoveries and the pursuit of new opportunities through exploration.

The company produced its fiscal year annual report in March 2019, highlighting a number of achievements.

These achievements included partnering in February 2019 with Petronas on blocks A2/A5 in The Gambia and milestone 2019 drilling at Samo-1 - the first well in The Gambia for 40 years.

In October 2018 the company submitted a field development and exploitation plan to the Senegalese Government after declaring commerciality on the project in July 2018.

The company had a notable $27.8 million cash and no debt at the end of 2018.

It planned to spend $10.3 million in the March quarter of 2019, with its next quarterly report expected later this month.

Inflection points

  • Regulatory approvals

  • Exploration and discovery successes

  • Seismic survey results from an offshore Western Australia asset, due in the December half-year of 2019

  • Final investment decision on Senegal asset developments about the September quarter of 2019

  • First oil in Senegal targeted for 2022

  • Acreage expansions, strategic agreements and significant transactions

  • Investor and majors’ interest in activities and milestones

Managing director Cath Norman outlines Senegal project history and timetable

“We have a focus on the northwest of the African continent in what is called the MSGBC — the Mauritania, Senegal, Guinea-Bissau, Conakry Basin,” managing director Cath Norman told Proactive Investors’ New York studio last month.

“At the end of 2014 we made the world’s largest oil discovery for the year, which was a fantastic achievement, and that field is offshore Senegal in a field called SNE.

“In the subsequent four years we’ve now drilled 11 wells offshore Senegal, all successful for oil.

“We’ve made four separate independent discoveries and drilled seven appraisal wells in the SNE field, so we’ve had huge success and we haven’t drilled a dry well yet offshore Senegal.

“The field is now 5 billion barrels of oil in place and we’re contemplating a development of 500 million of those barrels.

“We should be getting to (final investment decision) for those developments for about the end of Q3-ish and our first oil would be 2022.”

 



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