Tuesday 5 May 2020

Sangomar Field Development approved by the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) joint venture and entered execute phase of activities

•  Grant of Exploitation Authorisation by the Government of Senegal for the Sangomar Field Development on 8 January 2020
•  Purchase contract for the floating production storage and offloading facility executed and operator issued full notices to proceed for the drilling and subsea construction and installation contracts
•  Placement and SPP totalling over A$157 million completed
• Debt financing not proceeding as expected due to COVID-19 and oil price impact on debt markets
• Commenced process to sell all or part of working interest in the Senegal RSSD project in parallel with investigating alternative sources of finance
• Cost cutting efforts well underway in wake of COVID-19, oil price rout and resultant slump in share price
• Cash and term deposits at end of quarter of US$80.3 million Projects update
  

Offshore Senegal (FAR 15% Working Interest (WI)) In January, The Government of Senegal approved the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) joint venture Exploitation Plan and granted the Exploitation Authorisation for the Sangomar Field Development offshore Senegal.

Woodside, as Operator of the RSSD joint venture executed the purchase contract for the floating production storage and offloading (FPSO) facility and issued full notices to proceed for the drilling and subsea construction and instalment contracts, including: - MODEC Inc for the purchase of an FPSO - Subsea Integration Alliance for the construction and installation of the integrated subsea production systems and subsea umbilicals risers, and flowlines - Diamond Offshore for two well-based contracts for the drill rigs Ocean BlackRhino and Ocean BlackHaw

Following the grant of the Exploitation Authorisation, the RSSD joint venture executed the Host Government Agreement with the Government of Senegal and took an unconditional final investment decision (FID) for the Sangomar Field Development phase 1.

The Development and Exploitation Plan outlines the full field multi-phase development of oil and gas and details how the Sangomar Field (formerly SNE Field) will be developed in a series of phases using a stand-alone floating production storage and offloading facility with an initial 23 subsea wells and supporting subsea infrastructure planned for Phase 1. The FPSO is sized for the integration of potential future development phases, including gas export to shore and future subsea tie-backs. First oil is targeted in 2023.

A high-definition 3D marine seismic survey across the SNE North, Spica area was completed in February 2020.

On 27 March 2020, the Sangomar Operator, Woodside, announced the joint venture was taking early action to manage the impacts of COVID-19 on the supply chain and project schedule. The joint venture continues to evaluate options to reduce the total cost and near-term spend whilst protecting the overall value of the investment.

Offshore The Gambia
Blocks A2/A5 (FAR 50% WI and Operator)

During the quarter, FAR completed a 3D seismic acquisition program over the A5 block, which was conducted by Shearwater GeoServices using the M/V SW Amundsen survey vessel. The program also included the acquisition of additional 2D seismic in the A2 block. The 3D acquisition program covered an area of A5 which was previously not covered by 3D seismic and is designed to increase the confidence of structural closure for a number of prospects. The program was completed efficiently and without any first aid, medical, lost time or environmental incidents. Processing of the seismic data is slated to be conducted through the remainder of 2020, after which time the data will be used to refine the interpretation of prospects within A5.

Good progress was made with early plans todrill the Bambo-1 well in 2020. Pre-drill subsurface studies continued as well as preliminary well designs and commencement of tendering for key
services and supplies for the well. At the end of the quarter, FAR, in collaboration with PC Gambia Ltd, a subsidiary of PETRONAS and upon informing the Ministry Of Petroleum and Energy, decided to defer the planned drilling program due to the COVID-19 pandemic. The project has been completed to a suitable hold-point, for reactivation at the appropriate time.

FAR also commenced three community projects in The Gambia for 2020. These are currently in progress although slower than expected due to limitations of COVID-19 restrictions. Guinea-Bissau.

Blocks 2, 4A and 5A (FAR 21.43% WI)

Operator has extended the suspension plan for drilling Atum-1X indefinitely. Formal documents for a 3-year extension to the Sinapa and Esperanca Licences have been approved by the JV partners and are
awaiting authorisation from Petroguin, the State oil company of Guinea Bissau, to submit to the Government
Kenya
Block L6 (FAR 60% WI and Operator)

FAR notes a recent announcement by partner Pancontinental Oil and Gas that the joint venture has resolved to surrender the L6 licence. Discussions are underway to this end, but no resolution has been passed. FAR also continues discussions with Pancontinental and Afrex regarding payment of outstanding cash calls to the Operator (FAR).

NW Shelf (Australia)
Block WA-458-P (FAR 100% WI and Operator)

In February, FAR received fast-track data volumes for its phase of the Davros Extension multiclient 3D survey during the quarter. Final QC of the data by CGG Services concluded post end of quarter and FAR was delivered the final seismic volumes in early April. Work planning for the integration of this data and ensuing farmout activities to promote the project are currently being reassessed under the prevailing conditions