First Australian Resources has signed an agreement with Shell Exploration Company to conduct an exploration program in respect of Sangomar Offshore, Rufisque Offshore and Sangomar Deep Offshore blocks off the coast of Senegal.
Under the agreement, Shell will fund a CSEM Data Acquisition and Geophysical Evaluation Program over part of the license area where a number of drilling prospects have already been identified by First Australian Resources (FAR) and its partner Petrosen.
According to the company, the CSEM acquisition phase is expected to commence in the second quarter of 2009, and will be followed by processing, interpretation and integration of results.
It said that, the objective of the program is designed to enable Shell to determine whether or not to exercise an option to acquire a 70% interest in the block and enter the second renewal period that includes a well commitment.
Under the Agreement FAR will, recoup approximately $US3.4 million in past expenditures regardless of whether Shell elects to exercise the Option and a further US$6 million in the event the drilling of a well leads to a commercial development.
Michael Evans, executive chairman of FAR, said: Reaching agreement with Shell is another landmark. Shell is a global oil and gas industry leader and has the technical and financial capacity to back up their potential entry into deepwater exploration, offshore Senegal.
