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- Far (FAR) has received the final credit approvals for an underwritten US$300 million lending facility
- Macquarie Bank, BNP Paribas and Glencore will each contribute US$100 million to fund the facility
- The company has also taken the Final Investment Decision (FID) and will now begin to execute Phase 1 of the Sangomar Field Development plan
- Far expects to produce the first oil at Sangomar in early 2023
- FAR is up 1.16 per cent on the market today, trading at 4.4¢ apiece
Far (FAR) has received the final credit approvals for an underwritten US$300 million ($436 million) loan facility and taken the Final Investment Decision (FID) for the Sangomar Field Development offshore in Senegal.
Final Investment Decision
Last week, Far and its joint venture (JV) partners signed the Final Investment Decision (FID) statement at a formal ceremony with His Excellency Macky Sall, the President of the Republic of Senegal and Senegal’s Minister of Petroleum and Energies, Mouhamadou Makhtar Cisse.
Woodside, the operator of the JV, has issued a notice to proceed with drilling and subsea construction and installation contracts.
The company has now moved into the execute phase for Phase 1 of the Sangomar Field Development.
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 ASX with peak net production of 13,670 bopd,” Managing Director Cath Norman said.
“Furthermore, FAR remains excited by the opportunities to substantially increase field recoveries, monetise the gas resource and grow the field’s overall resource size,” she told the market.
Underwritten Senior Loan Facility
The underwritten $436 million (US$300 million) underwritten senior loan has been approved by Macquarie Bank, BNP Paribas and Glencore.
The facility is a key part of the funding package to develop’s far interest in the Sangomar oil field in Senegal. It has a 7-year term and is priced at a margin of 7.75 per cent over the London Inter-bank Offered Rate (LIBOR).
Over the next few months, Far will conclude the documentation process for the reserve-bank-lending, select its preferred provider of junior debt and conclude the necessary funding for the Sangomar project.
“Reaching agreement for a US$300m 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,” Cath said.
Sangomar Project
Phase 1 development is expected to produce 231 million barrels and consist of 23 subsea wells, including water injectors to provide waterflood as a mechanism to improve recovery efficiency.
The company expects to produce its first oil at Sangomar in early 2023.
“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,” Cath said.
“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,” she added.
Far is up 1.16 per cent on the market today, trading at 4.4¢ apiece at 12:26pm AEDT.
