Australian energy company WHL Energy Ltd. has signed a farm-in agreement with Ophir Energy plc under which Ophir will farm-in to earn a 75% interest in WHL Energy’s exploration interests offshore the Seychelles.
Under the terms of the farm-in, Ophir will fully fund the acquisition of 579 square miles (1,500 square kilometers) of 3D seismic, up to a total amount of $17 million. On meeting the conditions of the farm-in agreement, including formal regulatory approval by the Seychelles government, Ophir will pay WHL Energy $4 million in cash for partial recovery of back costs.
Following the acquisition and evaluation of the initial seismic, and on or before July 31, 2015 (or Dec. 31, 2015, if a seismic vessel has not begun data acquisition by May 31, 2014), Ophir may either withdraw from the farm-in or exercise the option to both fully fund the acquisition of a further 386 square miles (1,000 square kilometers) of 3D seismic, up to a total amount of $12 million (the Additional Seismic); and fund 90% of the costs of the first exploration well, up to a total amount of $30 million.
Upon exercising the option to retain its interests, Ophir will pay WHL Energy a further $2 million in cash for further partial recovery of back costs.