Erin Energy Corp. (NYSE: ERN) said Feb. 26 its joint venture partner, FAR Ltd. has signed a farm-out agreement with a subsidiary of Malaysia’s Petronas .
The farm-out agreement, expected to be completed March 31, 2018, assigns a 40% interest in the A2 and A5 offshore blocks in the Gambia to Petronas with FAR retaining operatorship and a 40% interest in each block. Erin Energy has a 20% interest in Blocks A2 and A5 following its farm-out to FAR in 2017.
As part of the agreement, Petronas will fund 80% of the joint venture’s Samo-1 well up to a US$45 million cap. The well is expected to be drilled in late-2018 and will be the first exploration well offshore the Gambia since 1979.
FAR estimates the Samo Prospect will contain prospective resources of 825 million barrels oil (best estimate, 100% basis, unrisked).