23 January 2017

SNE-5 starts drilling

  • Drilling the SNE-5 well offshore Senegal started on Saturday 21 January, 2017.

  • SNE-5 and SNE-6, to be drilled by the Stena DrillMAX, are located in the southern area of the SNE oil field. Oil flow and interference testing will evaluate the deliverability and connectivity of the SNE upper reservoir units.

  • Information from these wells will further fine-tune the SNE development concept, which currently incorporates a phased development to capture the large and extensive resource base.

Drilling of the SNE-5 appraisal well, offshore Senegal, began on Saturday 21 January.

SNE-5, and the following well SNE-6 will be drilled by the drill ship Stena DrillMAX (see Figure 2) and will evaluate the upper SNE reservoir units, specifically reservoir connectivity and deliverability, by conducting oil flow tests, including interference testing.

The two new wells follow the highly successful SNE-2, SNE-3, BEL-1 and SNE-4 appraisal drilling program completed on the SNE oil field in June 2016.

SNE-5 and SNE-6 are being drilled to help improve the joint venture understanding of the characteristics of the upper SNE reservoir units and ensure potential development wells in these units are placed to optimise oil recovery and maximise value per well. The locations of the SNE-5 and SNE-6 wells are shown in Figure 1.

SNE-5 will now be drilled to total depth, after which a wireline logging and drill stem testing (DST) program is to take place. The extent and composition of the DST program will be finalised following examination of the log data from the well.

SNE-5 is located in the southern area of the SNE oil field approximately 2km south east of SNE-3. SNE-6 is to be drilled immediately after the completion of SNE-5.

FAR Managing Director, Cath Norman, said,

"SNE-5 is the first of two new wells that will further evaluate the potential of the SNE oil field, specifically to improve our understanding of the upper SNE reservoir units and their contribution to the conceptual development plans for this world class asset.

The Stena DrillMAX has been contracted for the two firm wells at highly favourable rates reflecting the current low-cost rig contracting environment.

FAR and its Senegal joint venture partners are considering further optional exploration wells to follow the two firm wells to take advantage of the low cost of the DrillMax. FAR has an extensive portfolio of undrilled prospects and together with our JV partners, we are keen to progress evaluation of the full Senegal PSC licence area now that we have a commercially viable project at SNE.

This area represents one of the world's most attractive emerging basins for oil and gas exploration as seen by the recent farm-in by BP to Kosmos' acreage to the north of FAR's blocks."

* Refer to Cautionary Statement in this announcement (Page 3) relating to estimates of prospective resources

FAR poised for continued success in 2017

FAR has achieved significant results to date and the drilling highlighted in this release together with other FAR activities planned over 2017 have potential to add further value. Some of the key achievements of FAR offshore Senegal are listed below.

  • Farmed down part of FAR's interest offshore Senegal to Cairn Energy and ConocoPhillips for US$196m carry and cash in 2013

  • Discovered new, world-class, deep water oil plays offshore Senegal in the FAN-1 and SNE-1 wells in 2014

  • SNE was rated as the world's largest discovery in 2014 by IHS

  • Drilled 4 highly successful SNE appraisal wells in 2015/2016, proving SNE is a world class oil field capable of delivering commercial oil flow rates

  • Increased the SNE contingent recoverable resource base from a 2C of 330mmbbls* to a 2C of 641mmbls* (and undergone 3 separate independent technical expert update/audits from RISC) (refer ASX announcement 23 August 2016)

  • Passed MEFS (minimum economic field size) for the SNE field, completed a detailed development plan for a phased devevelopment of SNE and and made a statement on commerciality (refer ASX announcement 1 September 2016)

  • Senegal joint venture now committed to pre-FEED development activity at SNE

  • Undertook three high-impact social programs in Senegal outside programs undertaken with the joint venture

  • Used FAR's unique understanding of the Senegalese plays to lever into neighbouring acreage and change the exploration focus of the Guinea Bissau JV

  • Awarded "Breakthrough company of the year for Africa" in 2016 by oil industry peers

Figure 1: SNE field showing SNE-5 & 6 location

Figure 2: Stena DrillMAX deep water drill ship

* Refer to Cautionary Statement in this report (Page 3) relating to estimates of prospective resources

Disclaimers *Prospective Resource Estimates Cautionary Statement - With respect to the prospective resource estimates contained within this report, it should be noted that the estimated quantities of Petroleum that may potentially be recovered by the future application of a development project may relate to undiscovered accumulations. These estimates have an associated risk of discovery and risk of development. Further exploration and appraisal is required to determine the existence of a significant quantity of potentially moveable hydrocarbons. Prospective and Contingent Resources - All contingent and prospective resource estimates presented in this report are prepared as at 27/2/2013, 11/3/2014, 5/2/2014, 13/04/2015, 13/4/2016 and 23/08/2016 (Reference: FAR ASX releases of the same dates). The estimates have been prepared by the Company in accordance with the definitions and guidelines set forth in the Petroleum Resources Management System, 2007 approved by the Society of Petroleum Engineer and have been prepared using probabilistic methods. The contingent resource estimates provided in this report are those quantities of petroleum to be potentially recoverable from known accumulations, but the project is not considered mature enough for commercial development due to one or more contingencies. The prospective resource estimates provided in this report are Best Estimates and represent that there is a 50% probability that the actual resource volume will be in excess of the amounts reported. The estimates are unrisked and have not been adjusted for both an associated chance of discovery and a chance of development. The 100% basis and net to FAR contingent and prospective resource estimates include Government share of production applicable under the Production Sharing Contract. Competent Person Statement Information - The hydrocarbon resource estimates in this report have been compiled by Peter Nicholls, the FAR Limited exploration manager. Mr Nicholls has over 30 years of experience in petroleum geophysics and geology and is a member of the American Association of Petroleum Geology, the Society of Petroleum Engineers and the Petroleum Exploration Society of Australia. Mr Nicholls consents to the inclusion of the information in this report relating to hydrocarbon Contingent and Prospective Resources in the form and context in which it appears. The Contingent and Prospective Resource estimates contained in this report are in accordance with the standard definitions set out by the Society of Petroleum Engineers, Petroleum Resource Management System.

* Refer to Cautionary Statement in this report (Page 3) relating to estimates of prospective resources

Forward looking statements - This document may include forward looking statements. Forward looking statements include, are not necessarily limited to, statements concerning FAR's planned operation program and other statements that are not historic facts. When used in this document, the words such as "could", "plan", "estimate", "expect", "intend", "may", "potential", "should" and similar expressions are forward looking statements. Although FAR Ltd believes its expectations reflected in these are reasonable, such statements involve risks and uncertainties, and no assurance can be given that actual results will be consistent with these forward looking statements. The entity confirms that it is not aware of any new information or data that materially affects the information included in this announcement and that all material assumptions and technical parameters underpinning this announcement continue to apply and have not materially changed.

FAR Limited published this content on 23 January 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 22 January 2017 22:25:09 UTC.

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