FAR Ltd. has received official confirmation from the government of Guinea-Bissau for the increase of its stake in the Sinapa and Esperanca licenses, which includes an extension, and the drilling of at least one well in each block.
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Map of Sinapa, Esperanca. Map from FAR. |
In early April, negotiations concluded with the national oil company of Guinea-Bissau, Petroguin, to revise the terms of both the Sinapa and Esperanca.
FAR believes the two blocks to display a similar geological setting to offshore Senegal and SNE field discovery.
Under the revised license terms negotiated by FAR and its joint venture partner Svenska Petroleum Exploration, FAR now has a 21.42% participating and paying interest in the permits, an increase from the 15% participating and 21.42% paying interests as previously reported. These changes reflect the fact that Petroguin will no longer have a participating interest in the joint venture prior to a commercial discovery. Upon making a commercial discovery, Petroguin will have a reduced participating and paying interest of 10% and FAR and Svenska will respectively have interests of 19.28% and 70.71%.
In addition, the new license terms negotiated include more favorable arrangements for deepwater investment including a reduction to production royalty rates payable to the government. The JV has also been awarded a three-year extension to the current license periods, now ending on 25 November 2020. During these license periods, the JV will drill one exploration well on each license with a minimum expenditure commitment for each license of US$3 million (gross). These changes in the terms of the licenses have been now been approved by government decree.
“FAR has previously mapped a 470 MMbbl prospect called Atum on the Guinea-Bissau shelf edge in a play similar to the large SNE discovery made by FAR and it’s Senegal partners in 2014,” says Cath Norman, FAR managing director. “FAR looks forward to working with Svenska and Petroguin leading up to drilling our first exploration well offshore Guinea-Bissau.”
FAR’s acreage offshore Guinea-Bissau is shown in the accompanying maps. Blocks 2, 4A and 5A are also known as the Sinapa and Esperanca blocks.
FAR has mapped the Atum prospect in Blocks 2 and 4A as a shelf edge prospect having a best estimate (P50) prospective resource of 471 MMbbl (gross, unrisked recoverable oil resources).
The company reported in 2016 to have an extensive inventory of leads and prospects mapped offshore Guinea-Bissau.
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