More Oil FAR Away In Senegal

Locally listed junior oil and gas explorer FAR Ltd (FAR) says it has made a second oil strike off the coast of Senegal in West Africa, announcing yesterday that it and its partners had struck oil in an exploration well, a month after the first strike in an earlier well was revealed.

That strike discovered a pool of oil estimated at 300 million barrels in a well called FAN-1.

The second strike was put at around 330 million barrels in a follow up well called SNE-1, which is still drilling.

FAR’s managing director Cath Norman said in a statement the latest strike is “highly likely” to be commercial.

FAR shares surged as much as 41% to 14c on the back of the news, around where it jumped to with news of the first strike in the FAN-1 well. They closed at 13.5c, up 36%.

In London shares in Cairn Energy, the 40% operator of the well, jumped 12%.

FAR YTD – FAR discovery ‘highly likely’ to be commercial

“It is incredible that FAR has made two very important oil discoveries with its first two Senegal wells,’’ Ms Norman said in a statement yesterday. FAR’s statement was issued in Australia.

Statements from other shareholders in the well, such as Cairn, the UK independent with 40% and US giant, ConocoPhillips with 35%, had not released statements yesterday. Senegal national oil company Petrosen has 10%.

FAR has a 15% stake in both wells.

The company said in yesterday’s statement that preliminary estimates of the size of the SNE-1 find range from 150 million barrels to 670 million barrels, with the most-likely number at around 330 million barrels.

The venture is operated by African oil specialist Cairn Energy, which owns 40%, while US major ConocoPhillips has 35% and the Sengal state oil company has 10%.

Shares in FAR rocketed 45% higher on the back of its first Senegal discovery in October.

FAR said in yesterday’s statement, "The SNE-1 well has discovered a 95 metre gross oil bearing column with net oil pay zone thickness of 36 metres in Albian aged sandstones which display excellent reservoir potential. High quality 32° API oil has been recovered to the surface.”

"The SNE-1 well is located in 1,100 metres (m) water depth, approximately 100 kilometres offshore in the Sangomar block with a target total depth of ~3,000 m.

"Notices of Discovery for the SNE-1 well and FAN-1 well have been issued to the Government of Senegal."

FAR managing director, Cath Norman, said, “This is another very significant oil find for FAR and Senegal. Based on preliminary estimates it is highly likely to be a commercial discovery.

“The SNE-1 discovery is a company making event for FAR following our earlier oil discovery in the FAN-1 well. The SNE-1 discovery has potential to lead to a large stand-alone development and is an important step forward in establishing an entirely new petroleum province which would be transformational for Senegal.

“It is incredible that FAR has made two very important oil discoveries with its first two Senegal wells. We expect to resume drilling on the SNE-1 well shortly to evaluate the deeper Aptian carbonate objective.

“The FAN-1 well intersected a significant gross 500m oil-bearing section which indicates the presence of a prolific oil generating province. The SNE-1 well proves hydrocarbons have migrated up onto the shelf area which bodes well for the extensive suite of prospects yet to be drilled in our Senegal blocks.

“FAR looks forward to working with the Government of Senegal and our joint venture partners in finalising follow up appraisal and exploration drilling plans,“ FAR directors said.

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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