Australia’s FAR Limited has mentioned it’s unlikely it is going to be in a position to finance its a part of the Sangomar venture growth in Senegal. Therefore, FAR has began a course of to promote all or a part of its working curiosity within the venture.
The Sangomar growth, positioned offshore Senegal, is operated by Woodside and FAR is likely one of the companions.
As reported in late March, FAR’s discussions with financiers are materially compromised within the current market situations, presenting challenges to its debt course of.
Disruptions attributable to the COVID-19 pandemic and the crash within the oil value adversely impacted FAR’s financing plans for the Sangomar growth.
The extreme tightening of world debt markets, particularly for oil and fuel firms, resulted within the debt preparations FAR had put in place firstly of the yr being unable to shut or full, FAR mentioned in an replace on Thursday.
FAR has been taking motion to hunt to protect shareholder worth from this world-class asset within the intervening weeks.
FAR is contractually dedicated to the Sangomar growth and the permitted 2020 work program and price range of $163 million. A closing funding resolution for the venture was made in January 2020.
FAR recognised that it’s unlikely to have the ability to fund its future share of the substantial venture commitments based mostly on its present money reserves and future fairness raises alone.
The course of has began to promote all or a part of the FAR working curiosity and examine different sources of finance.
In addition, the three way partnership is working along with contractors to chop capex and rephase expenditure into the long run to ease the stress on all companions’ money circulate presently.
The Sangomar growth was working $117 million beneath price range for the yr to finish of March and FAR expects this development to proceed.
FAR Managing Director, Catherine Norman, mentioned: “The key problem for FAR over the approaching weeks is managing the fallout of the COVID-19 epidemic and oil value rout with respect to our ongoing dedication to the Sangomar subject growth and related work program and the price range permitted for 2020.
Norman added: “Progressing a sell-down of FAR’s working curiosity in Senegal or arranging different financing for FAR’s share of the event and on the similar time preserving money and shareholder worth in our property stay clear aims of the board presently”.
It can be price reminding that FAR and Woodside have not too long ago settled their dispute associated to Woodside’s entry into the Sangomar venture.
Under the settlement, every occasion agreed to withdraw its respective claims and bear its personal charges, prices and bills within the arbitration.
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