• Member Login
  • |
  • Join Now
PESA - Petroleum Exploration Society of Australia

Promoting Professional and Technical Excellence in Energy Geoscience - Networking, On-going Professional Education, Monthly Technical Meetings

  • Home
  • About
    • Objectives
    • PESA History
    • PESA Affiliates
    • Financial Protocols
    • Constitution and Rules
    • Strategic Plan
  • Events
    • Online
    • ACT
    • QLD
    • SA / NT
    • VIC / TAS
    • NSW
    • WA
    • Industry Events
    • Social Events
    • Past Events
  • Memberships
    • Join Us
    • PESA Membership Awards
  • Latest News
    • Feature Articles
    • Industry
    • Company Updates
    • Tech Talk
    • PESA Branch Activities
  • Library
    • Technical Library
    • PESA News Magazine
    • Knowledgette Recordings
  • Scholarships
  • Employment
    • View Job Opportunities
    • Submit Job
  • Contact
Company Updates
Feature Articles

FAR says Sangomar for sale sign has piqued suitors

By Dale Granger | 28/07/2020

28/07/2020 by Dale Granger

share
share
tweet

Cairn Energy has agreed to sell its 40% stake in the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore contract area to Russia’s Lukoil for a cash consideration of up to $400 million, in addition to reimbursement of capital expenditure incurred since January.

Completion of the sale is expected to be finalised in the fourth quarter of 2020 and Cairn said it will return at least $250 to shareholders.

This come after FAR Limited said it had received a “good level of interest” for the sale of its 15% stake in the $4.2 billion Sangomar oil and gas development offshore Senegal.

The Melbourne-based explorer was hard hit by the COVID-19 outbreak earlier this year which had a double-whammy on crude oil prices which plunged to as low as $10 a barrel in the second quarter.

Financing reversal

This left FAR in a precarious position as the company was unable to secure $300m in debt to fund its share of the project. In January FAR announced that it had tied up a $300m senior secured reserve-based lending facility, but lead banks subsequently said that the were unable to complete the syndication in the current environment.

FAR then defaulted on its project contributions in June. The company said it would forfeit its interest without compensation if its obligations had not been fulfilled within six months.

Cath Norman
Far Ltd Managing Director Cath Norman.

FAR then started a process to sell all or part of its working interest in the project and in its recent quarterly report, managing director Cath Norman said: “As time progresses and global markets continue to be stressed, there remains uncertainty around FAR’s ability to conclude a financing option. At this point in time, a sale or partial sale is a more likely outcome. FAR has run data rooms for this purpose and has had a good level of interest.”

Simon Thomson, Chief Executive of Cairn said of the Lukoil deal: “We are proud of what Cairn has achieved in Senegal. Our discoveries were the country’s first deep-water wells and opened up a new basin play on the Atlantic Margin. What’s more, they successfully laid the foundations for Senegal’s first oil and gas development, which will deliver enduring benefits to its people.

“With a strong balance sheet, low breakeven production and limited capital commitments, Cairn will have enhanced financial flexibility to invest in and grow the business whilst always remaining committed to returning excess cash to shareholders.”

Processing of the high definition seismic survey over the Sangomar field and FAN discovery has been completed and interpretation of this data has started. Processing of the seismic data over the exploration area to the north of the Sangomar field is continuing.

Woodside, the operator of the development, has undertaken a program to rescope, reschedule and reprice the Sangomar project to reduce capital expenditure to ease the pressure on financing or the development.

The project is believed to be on track for first oil in 2023, in spite of reports that Senegal had been forced to delay its first oil and gas projects by up to two years due to the coronavirus, and is expected to deliver five million tons of crude oil per year.

Related Articles

Drone attacks put petrochemical feedstock supply under strain

24/09/2019

oil price crash
Crude collapse to crush US petrochemical advantage

17/03/2020

US offers 76 million acres in new Gulf of Mexico lease sale

18/07/2017

Cairn clarifies timeline for SNE Oilfield development

13/03/2017

Show CommentsHide Comments

Become a Member

petroleum exploration society member badge

Join PESA now and enjoy full membership benefits

  • access to fully searchable technical library
  • extensive networking opportunities with industry leaders and peers
  • further professional education and training
  • and more!

VISIT MEMBERSHIP PAGE

Upcoming Events

Thu 15

PESA WA Technical April lunch talk- The role of geoscientists in the move to a low carbon future.

Thursday, 15 April @ 12:00 pm - 2:00 pm (Australia/Perth time)
Tue 20

LIVE WEBINAR – An Out of This World Concept, Sequence Stratigraphy and Mars

Tuesday, 20 April @ 11:00 am - 12:00 pm (Australia/Perth time)
Wed 21

PESA QLD: Online Course – Introduction to Python for Geoscience – 2021

Wednesday, 21 April @ 12:30 pm - 4:30 pm (Australia/Brisbane time)
Wed 21

Workshop 2 With Rob Kirk: Slopes – From Outcrop To Subsurface

Wednesday, 21 April @ 5:00 pm - 8:00 pm (Australia/Adelaide time)

View all events »

View Upcoming Events By Branch

PESA Events by State PESA Events in Western Australia PESA Events in South Australia and Northern Territory PESA Events in Victoria and Tasmania PESA Events in NSW PESA Events in Queensland

(Click on the the map)

PESA MAGAZINE – LATEST EDITION

PESA News Issue 159

Previous Editions

Most Popular Posts

Popular Posts

  • Buru Exploration Program Colossal Canning Basin exploration program set for June
  • MRL Exploration Permits Mineral Resources expands gas exploration footprint
  • Decommissioning APPEA: Let’s get decommissioning right
  • Lukoil says “nyet” to FAR takeover
  • Blue Energy Drill rig Blue Energy and Origin sign new long term gas supply deal
  • Oil&Gas India India poised for one third of all oil and gas project starts in APAC

Norwood Resources

the Norwood resource

PESA members please use this group to help with “social license to operate” issues.

Topics

Golf WA

Recent Jobs

  • Exploration Geoscientist

    • Perth
    • Buru Energy
    • Full Time
More job posts »
PESA - Petroleum Exploration Society of Australia

The Petroleum Exploration Society of Australia is a non-profit association of individuals involved in the exploration of oil and gas.

Stay in the loop

Subsribe to our newsletter and stay on the loop of what is happening in the petroleum industry and events near you

 

 

Contributors
Dale Granger
Editor

Connect with us

Logo-2CRev-66px-TM
Copyright © 2021 PESA - Petroleum Exploration Society of Australia. All Rights Reserved.
  • Advertise
  • Contact
  • Policies
  • Privacy
  • Terms & Conditions