UK-based oil and gas explorer and developer Cairn Energy has entered into a farm-in agreement with FAR, for three offshore blocks in Senegal, West Africa.
FAR is an Australian oil and gas explorer that operates the three contiguous blocks Rufisque, Sangomar and Sangomar Deep, along with its joint venture partner and Senegal National oil Company Petrosen.
Under the agreement, Cairn Energy will acquire 65% working interest in the blocks and gain operatorship by funding 100% of costs of one exploration well. FAR will own 25% and Petrosen will hold 10% interest.
Cairn Energy chief executive Simon Thomson said, "The Senegalese acreage is an excellent strategic fit for Cairn and as an Operator gives us access to a gross prospective resource potential in excess of 1.5 billion barrels."
The costs thereafter will be apportioned and Cairn will pay 72.2%, while FAR will spend 27.8%.
In addition, Cairn will pay a total of about $10m for the costs incurred by FAR on the blocks till date.
The three blocks spread over an area of about 7,490km² near shore to deep water exploration over the shelf, slope and basin floor of the Senegalese portion of the Mauritania-Senegal-Guinea-Bissau Basin.
The asset is covered by a 2,050km² 3D seismic survey and a number of play types, leads and prospects have been identified.
The deal has added a number of drillable prospects to Cairn Energy’s frontier exploration inventory and drilling program.
The working and paying interests for any development will be distributed among Cairn, FAR and Petrosen with 59.2%, 22.8% and 18%, respectively.
The farm-in is subject to regulatory approval.