FAR farmout deal in Kenya’s Block L6 unlikely in 2014

Australian explorer FAR Ltd has said that its expected farmout in Block L6 where the company has a 60% interest is unlikely to happen in 2014.

In the latest report FAR says the L6 farmout is likely to happen in early 2015 an extension from the earlier expected October date.

The farmout is expected to fund the drilling of an offshore well that is set for 2015. The well follows the recent Sunbird-1 discovery well drilled by the BG Group with the Miocene reef play extending along the Kenyan coast and through both of FAR’s offshore blocks, L6 and L9.

“FAR has had strong industry interest in its L6 farm out opportunity but reports that the timetable to conclude a farmout deal will likely slip to early 2015,” the company says in a statement.

In February of this year, FAR completed it’s third farmout to the Milio group of companies as a result of which the company was to carry through an onshore well and an onshore 2D seismic survey and associated processing and interpretation. The seismic survey was due to commence in June.

A number of recent security incidents in the northern coastal area of Kenya have delayed the start of these seismic operations and as a result, the L6 joint venture was awarded a one year extension to the current PSC terms by the Government of Kenya.

FAR now says it is working with Milio and the Kenyan Ministry of Energy and Petroleum to monitor the situation and put in place appropriate risk mitigation strategies before commencing on ground operations.