The deal is, however, subject to the approval of the Senegalese government.
Cairn Energy plans to spud an exploration well on the asset early next year and Cairn will, as part of the agreement, operate and carry FAR through this first well to acquire a 65% working interest in the blocks.
Cairn will fund the costs of the well and testing to an investment cap of US$80 million and will also pay FAR US$9.8 million for past costs.
FAR will retain a 25% stake while Senegal’s national oil company Petrosen will hold the remaining 10% interest.
“With this agreement FAR has secured a highly experienced operator to drill and fund it through the first exploration well to be drilled off the Senegalese coast for some years,” FAR managing director Cath Norman said on Tuesday.
“Success on this first exploration well would open up the significant exploration upside potential of FAR’s Senegal blocks in which FAR has identified and matured a very large prospect portfolio,” she added.
The three contiguous blocks – Rufisque, Sangomar and Sangomar Deep – cover about 7490 square kilometres within the Mauritania‐Senegal‐Guinea‐Bissau basin.
FAR has identified a number of play types and mapped 11 potentially drillable prospects from 2050 square kilometres of 3D seismic data acquired in the blocks.
According to the company, the blocks have been estimated to hold combined unrisked prospective resources of almost 3.6 billion barrels of oil.
After the first carried well, any further exploration costs will be 72.2%-funded by Cairn and 27.8%-funded by FAR.
The pair have also established an area of mutual interest agreement to work together to evaluate other potential exploration opportunities offshore Senegal.