A subsidiary of Malaysian state-owned firm Petroliam Nasional Berhad (Petronas) has entered an agreement to acquire a 40% interest in each of FAR ’s offshore petroleum licences Blocks A2 and A5 in the Gambia, West Africa.

Under the agreement, Petronas is required to fund 80% of the total well costs of the SAMO -1 exploration well up to $45m and make a payment of $15m to FAR in exchange for buying the stake.

Following the farm-out, FAR will retain a 40% interest in each of the licences.

The total consideration includes a refund of well and non-well back costs.

Under the arrangement, licences will be operated by FAR through the exploration phase, while Petronas has a right to assume operatorship during development stage.

FAR managing director Cath Norman said: “This farm-out deal with Petronas is further recognition of the value of our Gambian licences and FAR’s status as a partner of choice in the Mauritania-Senegal-Guinea-Bissau-Conakry Basin.

“Covering 2,682km², the licences lie in water depths ranging from 50m to 1,500m.”

“Petronas brings world-class technical and financial strength to our joint venture. Petronas also has significant deepwater development expertise in the event of a discovery.”

The joint venture (JV ) intends to drill the Samo-1 well later this year.

Based on assessment made by FAR, the Samo prospect is said to contain prospective resources of 825 million barrels of oil.

Covering 2,682km², the licences are adjacent to FAR’s SNE oilfield discovery and lie in water depths ranging from 50m to 1,500m.

Alongside Samo, the company mapped another drillable prospect in Bambo.

Closure of the deal is dependent on receipt of approval of the Republic of the Gambian Government and customary JV consents.