Highlights

• The Board continues to forecast expenditure for the full year ending 31 December 2022 to be in line with previously reported guidance of US$6.8 million.
• FAR expects to receive full payment of the US$55 million Contingent Payment due from the sale of its interest in Sangomar.
• Cash at quarter end of US$35.7 million.
• The Board and management team continue to examine a range of opportunities that seek to have the share price better reflect the underlying asset value of the Company. 

The Gambia

FAR acquired a further 50% interest in The Gambia Blocks A2 and A5 giving the Company a 100% working interest. 

• Commitment to drill an exploration well during the next two-year contract term removed.
• FAR has opened a data room for suitably qualified parties to consider participation in a joint venture to undertake and fund the work program for the extension exploration
• period.
• New laboratory analysis has positive implications for the Panthera Prospect directly up-dip of Bambo-1. 

Commenting on the activities during the quarter, Independent Chairman Patrick O’Connor said:
“FAR continues to take steps towards creating shareholder value. Our acquisition of the remaining 50% of The Gambia assets, along with changes to the work program obligations, maintain options for FAR to utilise the valuable exploration data from the project to further value the asset.

With the Sangomar Field progressing towards first production in the second half of 2023, the net present value of the Woodside Contingent Payment continues to increase. The Board will consider opportunities for the monetisation of this asset nearer the commencement of production from the field. This is in line with our strategy to explore every opportunity to reflect the underlying asset value in the FAR share price. FAR continues to evaluate broader opportunities across the energy sector and intends to balance any initiatives against the underlying value of our capital position.” 

The Gambia - Blocks A2/A5 (FAR 100% working interest)

The A2/A5 license for the Initial Exploration Period expired on 30 September 2022 and the Company’s partner, PC Gambia Ltd, a subsidiary of Petroliam Nasional Berhad (‘Petronas’), assigned its 50% interest in the licence to FAR during the quarter.

The First Extension Exploration Period for Blocks A2 and A5 commenced on 1 October 2022 for a two-year period and the Government of The Gambia agreed to remove the obligation to drill an exploration well during this term. The removal of the commitment to drill results in a significant reduction in expenditure and allows for a detailed geoscience review incorporating the results of the Samo-1 and recent Bambo-1 wells to ensure future exploration wells are located optimally. The 100% interest in Blocks A2 and A5 and revised investment obligation enhances FAR’s ability to seek farm-in partners to the project and allows the Company to consider options to deliver value from The Gambia while minimising expenditure over the two-year extension period.

The Company has opened a data room for suitably qualified parties to consider participation in a Joint Venture to undertake the geoscience review and ultimately to drill additional exploration wells. FAR expects new partners to fund the costs of the work program. Subject to the satisfaction of certain conditions, including Government approval, incoming participants in the Joint Venture may assume operatorship.

Full assessment of information obtained from the Bambo-1 well continued during the quarter. As previously reported (refer to FAR ASX announcement dated 26 August 2022), based on the encouraging results FAR commissioned further laboratory analysis and a detailed rock physics study of the Bambo-1, Bambo-1ST1, Samo-1 and Jammah-1 wells during the quarter to determine how best to discriminate lithology and fluid characteristics from seismic data. The results of the study and the further analysis will guide future exploration efforts and assist in attracting new partners into the Block A2/A5 Joint Venture.

The Board’s strategy for 2022 is to capitalise on the valuable exploration data so far acquired in The Gambia without drawing down on existing capital to any meaningful extent. 

Woodside Energy Contingent Payment

As part of the consideration for the sale of its interest in the RSSD Project in Senegal to Woodside Energy, FAR received rights to a Contingent Payment with a maximum value of US$55 million.

Based on the recent statements by Woodside and current oil prices, the Board of FAR expects that the full US$55 million will be received prior to the transaction long stop date in 2027, with annual payments anticipated to commence in early 2024.

New Business Opportunities

The Board is actively considering new business initiatives across both oil & gas and energy transition sectors.

Any significant new business initiatives must have the potential to offer significantly better returns to shareholders than share buy-backs or capital returns. 

KeyFacts Energy: FAR Australia country profile