Cash strapped FAR Ltd. has admitted it cannot exercise its right over the sale of the 40% working interest in the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) Contract Area, offshore Senegal, held by Cairn Energy plc, to LUKOIL, as announced by Cairn in July.
In that case, operator Woodside Energy has the opportunity to take all of that equity.
If Woodside successfully acquires Cairn’s interest, the working interest of the remaining joint venture partners in the Sangomar exploitation area will be Petrosen 18%, FAR 13.67%, and Woodside 68.33%. The working interest in the remaining RSSD evaluation area (including the FAN and SNE North oil discoveries) will be Petrosen 10%, FAR 15% and Woodside 75%.
The Sangomar oilfield development, located in these two contract areas, is under development and Woodside has assured it is on course for first oil by 2023.
The sale of Cairn’s working interest is still subject to Cairn shareholder and Government of Senegal approval.
FAR remains in default of its payments to the RSSD joint venture, with the effective date of 23 June 2020. Its June, July and August cash calls are currently unpaid and total $28.2Million. The interest accrued to date on these payments is $0.07Million. As at 31 July 2020 FAR has cash of $63.4Million. FAR has 6 months from the date of default to make good its payments (plus interest) to the joint venture to come out of default. FAR continues to progress a sale of all or part of its working interest.