Recoverable resources upgraded for SNE oil field offshore Senegal

FAR Ltd., Perth, has released the results of an independent report that shows a 14% increase from calculations made in April in the contingent resources of SNE oil field offshore Senegal. The report, completed by Perth consultancy RISC Operations Pty. Ltd., has upgraded the 2C contingent recoverable resources for SNE field to 641 million bbl.

The 1C resources, meanwhile, have increased to 348 million bbl, up 26% on the April figure, while 3C resources have risen 5% to 1,128 million bbl.

The upgrade includes results from the BEL-1 and SNE-4 wells (OGJ Online, May 19, 2016; Apr. 11, 2016).

FAR says the material increase in SNE’s resources is a result of improved understanding of SNE field parameters as a result of the appraisal drilling and associated wireline logging, flow testing, core data, and high-quality reprocessed 3D seismic data.

The SNE-1 discovery was made in November 2014. The four appraisal wells since then cover a distance of 9 km in a north-south direction and 5 km across. All the wells confirmed a gross oil column in excess of 100 m thickness containing 32° gravity oil.

The structure has an estimated aerial extent of more than 350 sq km and provides the basis for declaring it a significant oil field.

Test flow rates from the SNE-2 and SNE-3 wells indicate the potential for commercial production rates. Further drilling, testing and other studies are continuing to define a development project.

ConocoPhillips deal

Relatedly, SNE joint venture participant ConocoPhillips has confirmed that FAR has a right of preemption over the proposed sale of ConocoPhillips interests in Senegal to Perth-based Woodside Petroleum Ltd., Perth. Woodside agreed a binding purchase and sale agreement with ConocoPhillips last month to acquire 100% of ConocoPhillips’s interests in Senegal for $350 million plus a completion adjustment of $80 million (OGJ Online, July 14, 2016).

The purchase covers 35% of three production-sharing contract exploration blocks offshore Senegal—Rufisque Offshore, Sangomar Offshore, and Sangomar Deep Offshore. The stake includes 35% interest in the SNE discovery as well as the nearby FAN oil discovery.

Woodside also took the option to operate the future development of the resource from current operator Cairn Energy.

After taking legal advice, FAR now says that ConocoPhillips failed to comply with the terms of the joint operating agreement in relation to the proposed sale of its interests in Senegal. As a consequence FAR believes that the preemption period has not yet commenced.

FAR has stopped short of saying that it will preempt the sale to Woodside, but has said it will participate in prompt efforts to reach an amicable solution to the matter.

At this stage Cairn has 40% of the permits, ConocoPhillips 35%, FAR 15%, and Senegal national company Petrosen 10%.

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