Erin Energy Announces Farm-Out Deal With FAR for Gambia Blocks
March 27 2017 - 8:00AM
Business Wire
Erin Energy Corporation (Erin Energy or the Company) (NYSE
MKT:ERN) (JSE:ERN) announced today it has entered into a definitive
farm-out agreement with FAR Ltd. (FAR), an Australian Securities
Exchange listed oil and gas company, whereby FAR will acquire an
80% interest and operatorship of Erin Energy’s offshore A2 and A5
blocks in The Gambia. Erin Energy will retain a 20% working
interest in both blocks.
Highlights:
- Erin Energy to farm-out 80% working
interest in the Company’s highly-prospective offshore blocks A2 and
A5 in The Gambia to FAR;
- FAR to fund Erin Energy through the
first exploration well;
- Erin Energy’s blocks are adjacent and
on-trend with FAR’s world-class SNE oil field offshore
Senegal.
Under the terms of the farm-out agreement, which is subject to
approval by the Government of the Republic of The Gambia, upon
closing of the transaction, FAR will pay Erin Energy a purchase
price of US$5.18 million and will carry US$8.0 million of the
Company’s share of costs in a planned exploration well to be
drilled in late 2018. In addition, if Erin Energy’s share of the
exploration well is less than US$8.0 million, the balance is to be
paid in cash to the Company.
Jean-Michel Malek, Erin Energy’s interim CEO, commented, “We are
excited to have attracted a partner with a reputation of success in
this rapidly-emerging and prolific basin into our offshore assets
in The Gambia. This partnership will allow us to keep a significant
stake in these highly-prospective blocks with no additional capital
investment required through the first exploration well, while also
strengthening the balance sheet and allowing us the ability to
consider additional growth opportunities. This farm-out highlights
our strategy of maximizing our exploration breadth while minimizing
exploration risk.”
Blocks A2 and A5 are adjacent and on trend with FAR’s 2014 SNE-1
oil field discovery, which was the industry’s largest offshore oil
discovery that year. Since the drilling of the SNE-1 well, FAR has
drilled five successful appraisal wells on the SNE field and
increased the field’s best case 2C contingent recoverable oil
resource to 641 million barrels on a 100% basis according to FAR
internal estimates.
In 2017, Erin Energy and FAR plan to undertake reprocessing and
interpretation of 3-D seismic data recently acquired by the Company
to further mature identified prospects on Blocks A2 and A5. The
Company acquired 1,504 km2 of modern 3-D 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.
The A2 and A5 blocks cover an area of approximately 2,683 km2
(663,000 acres) within the emerging and prolific
Mauritania-Senegal-Guinea-Bissau Basin and lie approximately 30km
offshore in water depths of 50 to 1,200 meters (164 to 3,900
feet).
Erin Energy Corporation is an independent oil and gas
exploration and production company focused on energy resources in
sub-Saharan Africa. Its asset portfolio consists of 7 licenses
across 4 countries covering an area of 19,000 square kilometres (~5
million acres), including current production and other exploration
projects offshore Nigeria, as well as exploration licenses offshore
Ghana and The Gambia, and onshore Kenya. Erin Energy is
headquartered in Houston, Texas, and is listed on the New York and
Johannesburg Stock Exchanges under the ticker symbol ERN.
For more information about Erin Energy or to request a hard copy
of the Company’s most recent complete audited financial statements
free of charge, please call +1 713 797 2940 or visit
www.erinenergy.com.
Forward-Looking Statements
This news release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. All statements,
other than statements of historical fact, concerning activities,
events or developments that the Company expects, believes or
anticipates will or may occur in the future are forward-looking
statements. Although the Company believes the expectations
reflected in these forward-looking statements are reasonable, they
involve assumptions, risks and uncertainties, and these
expectations may prove to be incorrect.
The Company’s actual results could differ materially from those
anticipated or implied in these forward-looking statements due to a
variety of factors, including the Company’s ability to successfully
finance, drill, produce and/or develop the wells and prospects
identified in this release, and risks and other risk factors
discussed in the Company’s periodic reports filed with the
Securities and Exchange Commission. All forward-looking statements
are expressly qualified in their entirety by this cautionary
statement. You should not place undue reliance on forward-looking
statements, which speak only as of their respective dates. The
Company undertakes no duty to update these forward-looking
statements.
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version on businesswire.com: http://www.businesswire.com/news/home/20170327005408/en/
Erin Energy CorporationLionel McBee, +1 713-797-2960Director,
Investor Relations and Corporate
Communicationslionel.mcbee@erinenergy.com
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