FAR raising funds for Sangomar project off Senegal
Australia’s FAR Limited is raising funds for its share of the development capex for the Woodside-operated Sangomar oil field development located offshore Senegal.
FAR said on Thursday it had completed an A$146 million conditional placement to institutional and sophisticated investors at A$0.0425 per share.
In addition, FAR said it would conduct a share purchase plan to existing eligible shareholders to raise up to a further A$30 million at the same price as the placement.
The proceeds from the placement form part of the planned financing package to fund FAR’s capex to first oil for the Sangomar development, working capital, and transaction costs.
The shares issued under the placement are conditional upon gaining shareholder approval at a general meeting to be held on or around January 16, 2020, and on the receipt of credit approved term sheet for an underwritten $350 million senior debt facility by December 31, 2019.
New shares issued under the placement will represent approximately 35.4% of the enlarged share capital of FAR, which will have 9,715,681,158 ordinary shares on issue.
FAR intends to use proceeds from the placement and share purchase plan to fund development capex to first oil. Along with FAR’s existing cash reserves, a $350 million senior debt facility, and a junior debt facility of up to $150 million, proceeds from the placement will be used to fund FAR’s share of capex to first oil of $492 million (which includes a 10% contingency).
The proceeds will also be used to strengthen the balance sheet and support associated working capital, including capex post first oil.
When it comes to the project, Woodside, as the operator, submitted its development and exploitation plan for the Sangomar field to the government of Senegal in early December. The submission was done ahead of the Final Investment Decision for the project scheduled to occur later this month.
The Sangomar Field Development Phase 1 concept is a stand-alone floating production storage and offloading (FPSO) facility with 23 subsea wells and supporting subsea infrastructure. The FPSO is expected to have a capacity of around 100,000 bbl/day, with first oil targeted in early 2023.
The FPSO will be designed to allow for the integration of subsequent Sangomar development phases, including gas export to shore and future subsea tie-backs from other reservoirs and fields. Phase 1 of the development will target an estimated 230 MMbbl of oil.
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