• CNOOC to acquire 55.55% interest from Svenska Petroleum Exploration GB in Sinapa and Esperanca licences offshore Guinea-Bissau
• Proven hydrocarbon system with 2 oil discoveries on licences
• Drill planning on target to test Greater Atum Prospect (471mmbbls, 100% basis, best-estimate prospective resource) in Q1 2020
• Greater Atum is a shelf-edge combined structural-stratigraphic play analogous to giant SNE oil discovery offshore Senegal
• FAR to retain its 21.42% participating interest in each of the licences.

FAR Limited (ASX: FAR) has approved the Request for Transfer of Interest from Svenska Petroleum Exploration GB (“Svenska”) of a 55.55% participating interest in the highly prospective Sinapa and Esperanca petroleum licences offshore Guinea-Bissau, to CNOOC West African Petroleum E&P SA (“CNOOC”). FAR will retain its 21.42% participating interest in each of the licences.

Map source: KeyFacts Energy

Under the terms of the farm-out agreement, CNOOC will be assigned a 55.55% participating interest in the Sinapa and Esperanca licences, with the obligation to fund 55.55% of all expenditures under their respective Agreement for Joint Venture Participation (“AJVP”) and Joint Operating Agreements (“JOAs”). CNOOC’s interest will convert to a 50.0% participating interest in each of the licences in the event of a commercial discovery.

Svenska will retain a reduced 23.03% participating interest and shall continue to act as operator while CNOOC, upon conclusion of the upcoming offshore drilling campaign, may elect to assume operatorship. Completion of the farm-out agreement is subject to approval from the Government of the Republic of Guinea-Bissau and customary Joint Venture consents, which under the AJVP, is not subject to pre-emption rights.

Svenska will continue to operate the exploration licences as the JV prepares to drill the first ever deepwater exploration well offshore Guinea-Bissau in the first quarter of 2020. Subject to receiving regulatory approvals, the transaction is expected to close in the third quarter of 2019.

Past offshore exploration in Guinea-Bissau had initially concentrated in shallow waters less than 200m targeting a variety of salt diapiric-related features. Drilling to date has encountered excellent quality reservoir sands across multiple intervals exhibiting abundant oil and gas shows. The Sinapa permit has two discoveries, with light oil having been recovered to surface from both those locations. The most significant of the two being the Sinapa discovery with contingent resources of ~13.4MMbbls of recoverable light oil (unrisked, 2C case, 100% basis).

The Joint Venture is advancing preparations for drilling of the Greater Atum prospect in early 2020, which will be the first offshore exploration well drilled since 2007 and the first ever deepwater exploration well offshore Guinea-Bissau. The Greater Atum prospect is a recognised shelf-edge play analogue of the giant SNE oil field offshore Senegal and has a best estimate prospective resource of 471mmbbls (gross, unrisked).

CNOOC West African Petroleum E&P SA, a subsidiary of CNOOC Limited, (together with its subsidiaries) is the largest producer of offshore crude oil and natural gas in China and one of the largest independent oil and gas exploration and production companies in the world.

FAR Limited Managing Director Cath Norman said, 
“We look forward to progressing the Guinea-Bissau acreage now that CNOOC have farmed into the project. Attracting a National Oil Company such as CNOOC shows the confidence that another major company has in FAR’s Guinea-Bissau acreage. CNOOC brings a wealth of technical and operational expertise and experience and we look forward to finalising the details of the future drilling plans that are expected to begin early 2020. We welcome CNOOC to the Joint Venture and look forward to a long and successful relationship.”

Link to FAR Guinea Bissau country page   l   Link to Svenska Petroleum Guinea Bissau country page   l   Link to CNOOC Guinea Bissau country page