The Republic of The Gambia Approves Farm-out to PETRONAS in Blocks A2 and A5
Thursday 30 August 2018
The Government of The Republic of The Gambia in West Africa has approved the assignment by FAR Gambia Ltd of a 40% interest in petroleum licences for offshore Blocks A2 and A5 in The Gambia to a subsidiary of Petroliam Nasional Berhad (“PETRONAS”).
Under the terms of the farm-out agreement executed in February 2018, PETRONAS will fund 80% of the exploration well costs of the Samo-1 well up to a maximum total gross cost of US$45.0 million. In addition to the well costs, PETRONAS will pay FAR cash consideration of US$6 million plus 80% of nonwell back costs. The proceeds are subject to reconciliation and were estimated to be A$19 million at 30 June 2018. PETRONAS acquires a 40% working interest with FAR retaining 40% of its original 80% interest.