Erin Energy Announces Approval of Farm-Out Deal with FAR in The Gambia
July 05 2017 - 8:00AM
Business Wire
Erin Energy Corporation (Erin Energy or the Company) (NYSE
MKT:ERN) (JSE:ERN) announced today that the Government of the
Republic of The Gambia has approved the 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.
Highlights:
- Erin Energy will retain a 20% working
interest in the highly-prospective offshore blocks A2 and A5 in The
Gambia;
- 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;
- Blocks A2 and A5 have potential to
contain prospective resources in excess of one billion barrels of
oil; (on an unrisked best estimated 100%) according to FAR.
As previously disclosed, under the terms of the farm-out
agreement approved by the Government of the Republic of The Gambia,
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,
the balance is to be paid in cash to the Company.
Femi Ayoade, Erin Energy’s CEO, commented, “We are pleased to
have approval from the Government of The Republic of The Gambia for
this transaction and look forward to working with FAR as a partner
in this rapidly-emerging and prolific basin. 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 seven 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 metres (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 9 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/20170705005262/en/
Erin Energy CorporationLionel McBee, +1 713-797-2960Director,
Investor Relations and Corporate
Communicationslionel.mcbee@erinenergy.com
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