First Australian Resources Limited (First Australian Resources), an oil and gas company, has received advice from the Minister of Energy for the Republic of Senegal confirming a one year extension to the first renewal period under the contract for exploration and hydrocarbon production sharing covering the Rufisque and Sangomar and Sangomar deep offshore blocks.

According to the Ministerial advice the extension granted to First Australian Resources will be for a one year period commencing from the date of a formal Presidential Decree to follow (as distinct from the current licence expiry date of November 22, 2009).

First Australian Resources is operator of three offshore blocks and holds a 90% interest with the balance being held by Petrosen (Senegal’s National Oil Company). The extension and large working interest of 90% will place First Australian Resources in a strong position with the continuing farmout process following Royal Dutch Shell Plc’s decision not to farm in to the blocks.

First Australian Resources has provided data packages to several large international exploration and production companies; detailed technical reviews are now in progress. To enable this process to continue and a farm-in partner or partners secured for the drilling of an exploration well, the co-venturers including First Australian Resources and Petrosen, requested the current contractual period of the license be extended by one year.

The successful application for the extension had been based on interest from industry participants with access to rigs and proven capacity to operate deepwater wells; the joint venture has met all their obligations under the first renewal period and have spent in excess of $21 million being nearly three times the minimum amount specified under the contract; in doing so the JV has acquired one of the largest 3D surveys off the northwest coast of Africa covering an area exceeding 2000 square kilometers resulting in a high quality data set that has been processed into a world class seismic volume leading to the identification of several plays and drillable prospects together with a CSEM study funded by Shell; work has been accomplished as rapidly as possible with due care and attention to detail thus resulting in the interest currently shown by E&P companies.

First Australian Resources is seeking cost recovery and a free carry through the drilling of one exploratory well.