(JollofNews) – The Government of the Gambia has given its blessings for FAR Ltd, an Australian Securities Exchange listed oil and gas company to acquire an 80 per cent interest and operatorship of Erin Energy Corporation’s offshore A2 and A5 blocks in the country.

Source: FAR Ltd.

According to Offshore Engineer , under the agreement, FAR will acquire 80% interest and operatorship of the blocks for US$5.18 million, while Erin will retain 20% working interest. FAR also will carry $8 million of Erin Energy’s share of costs for an exploration well planned for drilling in late 2018.

The farm-out agreement was announced in March of this year.

The blocks are adjacent and on-trend with FAR’s 2014 SNE-1 oil field discovery offshore Senegal. The A2 and A5 blocks cover an area of approximately 2683sq km (663,000 acres) within the emerging and prolific Mauritania-Senegal-Guinea-Bissau Basin, and lie approximately 30km offshore in water depths of 50-1200m (164 to 3900ft).

Since the drilling of the SNE-1 well, FAR has drilled seven successful appraisal wells on the SNE field and increased the field’s best case 2C contingent recoverable oil resource to 641 MMbbl on a 100% basis, according to FAR internal estimates.

This year, Erin Energy and FAR plan to undertake reprocessing and interpretation of 3D seismic data recently acquired by the company to further mature identified prospects on Blocks A2 and A5, Erin Energy said in the release. The company acquired 1504sq km of modern 3D seismic data and has identified prospects on the blocks, which are similar to the “shelf edge” play FAR is targeting in its offshore Senegal blocks.

Erin Energy CEO Femi Ayoade said the farm-out highlights the company’s strategy of maximizing its exploration breadth while minimizing exploration risk.

FAR Managing Director Cath Norman said in a 3 July statement that FAR’s discoveries immediately to the north in offshore Senegal would provide “high potential” to create value for both the people of The Gambia and FAR shareholders.