Far Ltd receives term extension in Kenya’s Block L6

Australian explorer Far Ltd has announced that it has received a 1 year extension in the PSC term of Block L6 after the company delayed planned activities Government of Kenya due to the inability to access the ground to complete planned seismic operations because of security incidents in the country.

In February 2014, the Group signed a farm-out to Milio E&P Limited and Milio International Limited of Dubai in relation to the onshore part of Block L6, Kenya. Under the terms of the farm-out deal, the Group will be fully carried through the drilling of an onshore exploration well in 2015 and the acquisition, processing and interpretation of a regional 1,000 line kilometre 2D seismic survey.

At the reporting date the conditions precedent of the farm out agreement had not been completed and the parties were negotiating an amendment to the farm-out agreement in light of the implications of the security incidents.

The Group will hold 24% in the onshore area, retains its full 60% interest in the offshore part of Block L6 and remains the operator in the block.

Meanwhile the company says it continues to pursue entry into Block 9 and the plans for future work program and has been in discussions with Dominion Petroleum Kenya Limited.

FAR’s subsidiary, Flow Energy Ltd, was a member of the bidding consortium that made an application bid for Block L9 in 2010.

Following negotiations with the Ministry of Energy and Petroleum, a heads of agreement was signed and Block L9 was subsequently awarded in May 2011.

Far says it is of the view that that the Miocene carbonate reef play, identified in Block L6 extends along the Kenyan coast and into Block L9 and that a future 3D seismic survey over the inboard part of Block L9 would evaluate this potential.

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