FIRST AUSTRALIAN RESOURCES (FAR) and Shell Exploration Company have agreed to conduct an exploration program in the Sangomar Offshore, Rufisque Offshore and Sangomar deep Offshore Blocks off the coast of Senegal.
Shell will fund a controlled source electromagnetic (CSEM) data acquisition and geophysical evaluation program over part of the license area where a number of drilling prospects have been identified by FAR and its partner Senegal's national oil company Petrosen.
The CSEM acquisition phase is expected to begin in the second quarter of 2009, followed by processing, interpretation and integration of results. The objective of the program is to enable Shell to determine whether or not to exercise an option to acquire a 70 per cent interest in the block and enter the second renewal period that includes a well commitment. The agreement is conditional upon obtaining various approvals and consents from the Government of Senegal, obtaining various approvals and consents from Petrosen and a waiver of Petrosen's pre-emptive rights, Shell entering into a contract to purchase CSEM Data and confirmation that a survey boat will be available to commence CSEM Data acquisition by May 15.
Upon satisfaction of the above conditions Shell will have until 90 days after the survey boat leaves the survey area to decide whether to exercise the option. If Shell exercises the option, Shell will have until 365 days prior to the end of the second renewal period to commit to drilling the exploration well. FAR has agreed to relinquish operatorship in favor of Shell in the event Shell decides to exercise the option.
