FAR Ltd delays 2D seismic acquisition in Kenya’s Block L6 over security concerns

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FAR has said it has delayed a planned onshore well and an onshore 2D seismic survey and associated processing and interpretation in Northern part of coast Kenya due to insecurity in the area.

According to a statement from the company the operations which were to start in June has been pushed forward as the company, its partner Milio and the Kenyan Ministry of Energy and Petroleum to monitor the situation and put in place appropriate risk mitigation strategies.

“Security incidents are currently hampering the commencement of the seismic survey to be conducted by Milio and the seismic survey will be delayed until it is safe to enter the area,” says the company’s management.

FAR which has a net interest of 60% offshore, 24% onshore and is the Operator of the block (farmed out to Milio in February) is however continuing its activities offshore and is currently progressing a farm out initiative for drilling an offshore well.

The company says the recent confirmation of oil in neighboring Block L10A and evidence of oil in the Maridadi well drilled at the northern extent in L6 has raised hopes in the block with a strong industry interest in its L6 farm out opportunity.

“A farm out is progressing to secure funding for the drilling of an offshore well on Block L6. The Company is actively seeking new opportunities in Kenya and the $8 million capital raising was to pursue these opportunities and support working capital requirements.”

The Miocene reef play in block 10A extends along the coast of Kenya and through both of FAR’s offshore blocks, L6 and L9.

In block L9 where Ophir energy is the operator FAR says it is awaiting unconditional Government approval for the Joint Venture agreements in relation to L9.

Following unconditional Government approval, FAR which holds 30% interest in L9 will pay Ophir approximately US$11 million relating substantially to back costs on seismic surveys and also provide funding for a bank guarantee in favour of the Government of Kenya in relation to the Block L9 work commitment.

The Operator plans to drill the first exploration well on Block L9 at the end of 2015.

During the quarter the Operator received a one year extension to the current exploration period. FAR intends to farm out part of its interest for drilling and has already received unsolicited expressions of interest.

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