Sangomar Field FID – FAR Ltd makes Final Investment Decision for the Sangomar Field Development

sangomar field fid

Sangomar field FID in Senegal has been taken by the partners who include Far Ltd.

FAR Ltd (ASX:FAR) has taken the Final Investment Decision (FID) to proceed with its involvement in phase one development of the Sangomar Field Development offshore Senegal with the project now moving into the execution phase.

FAR, along with its partners in the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) joint venture, last week signed the FID statement at a ceremony with His Excellency Macky Sall, President of the Republic of Senegal and the Minister of Petroleum and Energies, Mouhamadou Makhtar Cisse.

The FID signing followed approval of the Exploitation Authorisation by the Government of Senegal and signing of the Host Government Agreement.

Woodside, as JV operator, has now issued a Full Notice to Proceed (FNTP) for the drilling and subsea construction and installation contracts.

Credit Facility Approvals

Another key milestone for FAR Ltd in the development is final credit approvals for an underwritten US$300 million senior secured reserve-based lending facility.

This binding and committed facility has been approved by Macquarie Bank Limited, BNP Paribas and Glencore, each to the amount of US$100 million.

The facility is a key part of the funding package to develop FAR’s interest in the Sangomar oil field in Senegal.

Sangomar Field FID – A Tier-One Oil Development Asset

FAR’s managing director Cath Norman said, “Reaching agreement for a US$300 million underwritten senior debt facility with three international firms, Macquarie, BNP Paribas and Glencore, is further endorsement and support for Sangomar being a tier-one oil development asset.

“Alongside Petrosen, the Senegalese State oil company, FAR is the longest standing member of the RSSD JV and is proud to have been a part of this project from early exploration, through discovery, appraisal and now, the exploitation of the resources in Senegal.

Project Financing Cntd…

“FAR looks forward to working with the Government and the partners to support delivery of first oil from this world-class project in early 2023 and transforming FAR from an explorer to a material producer on the Australian Stock Exchange (ASX) with peak net production of 13,670 bopd.

“Furthermore, FAR remains excited by the opportunities to substantially increase field recoveries, monetise the gas resource and grow the field’s overall resource size.”

The reserve-based lending has a 7-year term with a 4-year repayment holiday and is priced at a margin of 7.75% over LIBOR.

Undrawn facility amounts will attract a commitment fee of 40% of the margin.

The banks’ underwriting is subject to the successful conclusion of pre-placement market soundings.

Far Ltd – Funding for Sangomar Project

In coming months FAR will conclude the documentation process for the lending facility, select its preferred provider of junior debt and conclude the necessary funding for the Sangomar project.

FAR will have raised in excess of US$400 million in new capital to fund its share of phase 1 capex for the Sangomar oil development, including an A$146 million equity placement (~US$100 million) and share purchase plan with receipts of A$11.18 million.

A general meeting of shareholders on Thursday, January 16, voted overwhelmingly in favour of approving the share placement.

The placement is due to conclude with settlement of funds scheduled for Thursday, January 23, 2020, and allotment of shares for Friday, January 24, 2020.

Share Placement – General Meetings

Norman said: “Securing the debt facility combined with the overwhelming support at the general meeting to approve the equity placement and good uptake in the SPP concludes this chapter in closing out the US$400 million in capital to support FAR’s FID decision.

“We fully appreciate the support of our shareholders who have helped us reach this important milestone and continue to believe that de-risking the financing component for the Sangomar project and commencing the execute phase for development is likely to generate significant shareholder value.”

Having taken FID, FAR also announces that reserves of 28MMbbls (2P net economic interest) associated with this development are attributed to the company.

Sangomar Field FID – Phase 1 Development

Sangomar Phase 1 development is anticipated to produce 231MMbbls of oil (2P gross) and is planned to consist of 23 subsea wells including water injectors to provide waterflood as a mechanism to improve recovery efficiency.

The wells will be tied back to a floating production storage and offloading facility (FPSO) for processing prior to export to market via tankers.

First oil is expected early in 2023 and the FPSO is designed to allow the integration of future development phases, including potential for gas export to shore.


In conclusion, Far Ltd’s Cath Norman: “2020 is shaping up to be a busy year for FAR, with a junior underwritten debt facility due to be put in place early in the year and the drilling of one of its highly prospective exploration opportunities in the neighbouring Gambia to follow in the second half of 2020.

“In addition, the Senegal JV is preparing for drilling in 2021, commencing with an appraisal well on the FAR or SNE North discoveries before embarking on the development drilling for the Sangomar Field development.