FAR Announces Quarterly Report, Completes 3D Seismic Survey Offshore Kenya

FAR Limited (FAR), an independent Australian Securities Exchange listed oil and gas explorer with high impact assets in West and East Africa has announced quarterly report for the period from 1 April 2012 to 30 June 2012 with the cash balance of $33.7M.

FAR also announced the completion of 3D seismic survey over the L6 permit offshore Kenya.

The permit lies in the Lamu Basin, north of recent, world scale, natural gas discoveries totaling around 100 trillion cubic feet off the coasts of Mozambique and Tanzania.

The L6 permit is in the Lamu Basin, offshore Kenya. FAR operates the block with 60% equity and has a 30% interest in the L9 block as shown above. The completion of the seismic survey fulfills the work program for the current period with the Kenyan Ministry of Energy. Final data delivery is expected in mid January 2013 and FAR is currently negotiating a timetable for delivery of early products so that the drill location can be finalized ahead of drilling in 2013.

The highly anticipated and large Mbawa prospect in neighbouring Block L8 is due to be spudded by Apache in August this year. Anadarko Petroleum Corporation has announced plans to drill the first of its wells before year end (Blocks L5, L7, L12, L11A, L11B) and BG is also preparing to drill its first well offshore Kenya (Blocks L10A and L10B). The well planned for Block L6 in 2013 will be FAR’s first well in Kenya.

Ophir Energy operates the L-9 Joint Venture in which FAR has a 30% interest. The JOA and Deeds of Assignment remain in the process of being finalised.

In the quarterly report FAR also announced further project updates:

Senegal

The process of bringing in a partner to drill a well with FAR in Senegal is underway and the company looks forward to providing updates as they become available.

FAR notes an important well to be drilled by African Petroleum on the Alhamdulilah Prospect in the Gambia that straddles FAR’s Senegal acreage (est 600mmbbls recoverable oil) is scheduled for the end of 2013. This prospect adds to the inventory of prospects that FAR has in the Senegalese acreage on offer to potential partners.

Guinea Bissau

The permits are currently in Phase 1 of the exploration term, which has been extended for two years to 25 November 2012. A further optional four year Phase 2 exploration period has a work commitment that includes a single exploration well.

There is no update to report regarding Guinea Bissau this quarter. FAR and their partner Svenska are planning for a partner meeting in early August and are watching the political situation in country very closely. They are not expecting the reported coup to impact the business in the near future.

AGC Profond

Work continues to evaluate leads in the block in readiness for entering a new exploration period in September 2012.

Australia

Work continues on compiling the regional data and reprocessing existing 2D and 3D seismic data ahead of planning a 3D seismic survey for early 2013.

Jamaica

FAR’s Jamaican project is located in the Walton Basin, Jamaica, and is owned by the Jamaica Joint Venture (JJV). FAR is a 50% equity partner in the JJV, with the operator being Finder Exploration Pty Ltd. The JJV continues to seek a partner for the drilling of a well offshore Jamaica.

China

FAR currently awaits receipt of a US$3 million payment due following the sale of the Beibu Gulf assets in 2009. This final tranche payment is due to FAR on the project producing 1 million barrels of oil. Recent reports to the ASX from the operator of the project indicate that production is targeted to commence around the end of 2012.

USA

Gas sales during the quarter totalled 9.6 million cubic feet (Q1 2012: 9.2 million cubic feet) for an average of 106 thousand cubic feet per day at an average price of US$2.08 per thousand cubic feet before production taxes (Q1 2012: US$2.81/MCF). Oil sales during the quarter totalled 1,447 barrels (Q1 2012: 1,157 bbl) for an average of 15.9 barrels of oil per day at an average price of US102.15 per barrel before production taxes (Q1 2012: US$101.95/bbl).

FAR Management commented:

“FAR moves into this next quarter with a strong cash position of $33.7M at 30 June 2012, however this does not reflect all of the payments to be made for this quarter from the completion of the Kenya seismic survey.

“This 3D seismic will be used to better define our prospects in the L6 block as we lead into drilling in Kenya in mid 2013. August will see the first exploration well being drilled by Apache in the Lamu Basin with Anadarko, Afren and BG also preparing to drill in the basin. We look forward to providing updates as news is available.

“During the quarter, we hosted our AGM in Perth with new Chairman Nic Limb at the helm. A series of presentations were made to stakeholders during the quarter, please refer to our website for copies of our AGM and investor presentations.”

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Subsea World News Staff , July 31, 2012;  Image: FAR