Simba Essel Energy Inc SMBZF

Far Australia complete Kenyan Farmout on L6

[PapaFritz]

Yet another relevant farm out in Kenya by junior FAR. The bottom paragraph I found to be quite relevant given the "final" terms and percentages retained, involved, etc.  
This is how I see things potentially playing out for Simba once the farm out with Calgary is signed and the seismic is shot. Simba must then farm out the drill program to another group and there is plenty of interest from companies looking to enter East Africa~!

FAR receives L6 farmout agreement approval from the Kenyan Ministry of Energy and Petroleum

Monday, February 17, 2014

 

• FAR has received approval from the Kenyan Ministry of Energy and Petroleum for its farm out agreement with Milio International on Block L6.
• FAR will be fully carried through a $30 million (FAR estimate) exploration work program including a regional onshore 1,000km 2D seismic survey and an onshore exploration well in Block L6.
• FAR retains all its rights to the highly prospective offshore part of Block L6, in respect of which farm out discussions are progressing.

FAR Ltd has received approval from the Ministry of Energy and Petroleum in Kenya for its first farm in deal on its highly prospective onshore and offshore Kenya exploration permit, Block L6, located in the Lamu basin.

Under the terms of the farm-in with Milio E&P Limited and Milio International ('Milio'), FAR will be fully funded through the drilling and testing of a high impact onshore exploration well in Block L6 expected to spud in H1 2015.

FAR will also be fully funded through the acquisition, processing and interpretation of a regional onshore 1,000 kilometre 2D seismic survey. This is expected to confirm a number of prospects in onshore L6 as drill targets.

This seismic program is expected to commence in April 2014.

FAR retains a 24% interest in the onshore part of Block L6. FAR also preserves its 60% interest in the highly prospective offshore part of Block L6 which FAR has estimated to contain substantial prospective resources.

(Reference: FAR ASX release of 27/2/2013). FAR is also currently in discussions with parties to farm-in to drill an offshore well in Block L6.

Block L6 is located to the north of major east coast Kenyan population centres and infrastructure. In the event the Milio funded exploration well in 2015 is a discovery, FAR plans to fast track an onshore development in order that production could contribute to Kenya's near term growing energy requirements and supply major power generation projects planned by the Kenyan Government.

'We are pleased that the Cabinet Secretary for the Ministry of Energy and Petroleum has approved our recently announced farm out agreement for Block L6, Kenya. We believe this deal, which FAR has secured funding for an onshore exploration well following a seismic survey, will evaluate the significant potential of the onshore part of Block L6 and unlock the potential of the wider Lamu basin in which FAR has a large acreage position.

FAR has now completed three farm-out deals within the last 12 months and as a consequence is fully funded through three high impact exploration wells in the near future. Next month FAR expects to start drilling the first of two company making offshore wells in Senegal which are together targeting over 1.5 billion barrels of unrisked prospective resources. FAR's farm in partners in Senegal are ConocoPhillips and Cairn Energy PLC'. Cathy Norman Managing Director

Farm in Agreement

Under the terms of the farm-in agreement between Flow Energy Pty Ltd, a wholly owned subsidiary of FAR (FAR), Pancontinental Oil & Gas NL ('PCL'), Afrex Ltd a subsidiary of PCL ('Afrex'), and Milio International Limited and Milio E&P Limited ('Milio'), each of FAR, PCL and Afrex agree, subject to certain conditions, to transfer certain rights in respect of the onshore area of Block L6.

The current participating interests in the Block L6 Production Sharing Contract (PSC) are FAR 60%, Afrex 24% and PCL 16%. When all conditions precedent are met, Milio will have a 60% interest in the onshore part of Block L6. FAR will retain a 24% interest in the onshore area and PCL and Afrex combined will retain a 16% interest. FAR will retain a 60% participating interest in the prospective offshore part of Block L6 and PCL and Afrex together will retain a 40% interest.

FAR remains Operator of the Block L6 Production Sharing Contract.