Erin Energy Corporation announced this week that it has entered into a definitive farm-out agreement with FAR Ltd., whereby FAR will acquire an 80% interest and responsibility of the operation of Erin Energy’s offshore A2 and A5 blocks in The Gambia while Erin Energy will hold a 20% working interest in both blocks, Mining Weekly reported.
According to Petroleum Africa,Under the terms of the farm-out agreement, FAR will pay Erin Energy $5.18m and will carry $8 million of the Company’s share of costs in a planned exploration well that’s supposed to be drilled by late 2018.
Jean-Michel Malek, Erin Energy’s interim CEO, commented, “We are excited to have attracted a partner with a reputation of success in this rapidly-emerging and prolific basin into our offshore assets in The Gambia. This partnership will allow us to keep a significant stake in these highly-prospective blocks with no additional capital investment required through the first exploration well, while also strengthening the balance sheet and allowing us the ability to consider additional growth opportunities. This farm-out highlights our strategy of maximizing our exploration breadth while minimizing exploration risk.”
Blocks A2 and A5 are in line with FAR’s 2014 SNE-1 oil field discovery, which was considered the industry’s largest offshore oil discovery that year.