The joint venture agreement with Hunt – one of the world’s leading independent energy companies – is still subject to approval from the Republic of Senegal.
Executive chairman Michael Evans said this opportunity represented a turning point for FAR and could “catapult the company into the big league.”
“The potential is evidenced by the performance of Hardman Resources, following Woodside operated discoveries in the northern portion of the Mauritania-Senegal-Guinea Bissau Basin,” Evans said.
“We are pleased to join a partner the caliber of Hunt Oil Company and look forward to a successful venture.”
FAR said the joint venture would explore a deep-water play with “giant” hydrocarbon potential in the Senegalese portion of the productive Mauritania-Senegal-Guinea Bissau Basin.
It said large closures were identified at the Aptian carbonate and Cenomanian sandstone levels, along with numerous Senonian stratigraphic leads.
FAR said the licence has significant upside potential exceeding 1 billion barrels of recoverable oil.
The Sangomar-Rufisque offshore licence covers 14,981 square kilometres over the shelf, slope, and basin floor.
“Contract terms are among the best in the world, and were recently improved as a result of the government reducing the tax rate to 25%,” Evans said.
FAR will contribute about US$9.3 million (A$12.48 million) to a proposed 2000 sq.km 3D seismic acquisition program, starting in the third quarter.
The proposed 3D survey is designed to validate several potentially significant prospects and a number of leads identified by Hunt, based on existing 2D seismic data.
FAR said the northwest African margin was relatively under-explored, but hosts numerous recent, sizeable, and intriguing discoveries including the Woodside operated Chinguetti and Tioff discoveries in adjacent Mauritania.
Pending approval by the Republic of Senegal, FAR is continuing due diligence for the licences.
Upon approval, interests in the Senegal project will be Senegal Hunt Oil Company (operator - 60%), First Australian Resources Limited (30%) and Petrosen (state oil company - 10%).
