March 22 (UPI) -- In a report to shareholders, energy company FAR Ltd. said its flagship basin offshore Senegal was primed for growth because of low costs and good appraisals.
FAR has nearly 3,000 square miles off the coast of Senegal under license and achieved discoveries already from its FAN and SNE wells. By the third quarter of 2016, the company said the SNE oil field in particular met the minimum threshold to be considered a commercial opportunity. That statement came less than two years after the field was discovered.
"We continue to spin the drill bit in anticipation of finalizing the appraisal of SNE and complete the development concept for the field in a few months," Chairman Nic Limb said in a statement.
The company is in the process of drilling the second of three appraisal wells planned for this year's drilling campaign. With each completion, the estimated volume of the reserves within the basin increase. And with each drilling campaign, the company said the costs of drilling moved lower, with offshore lease rates dropping from $675,000 per day when SNE was discovered to below $200,000 per day.
By the company's estimates, more than 1.5 billion barrels of oil may be in basins off the coast of Senegal. When it was discovered in 2014, SNE was ranked as the largest oil discovery in the world.
"We anticipate that the SNE field will continue to grow in size as we complete the appraisal drilling program and head towards finalizing development plans for the field," Limb said.
Energy advisors at legal firm Orrick said Senegal has a legacy as a target for oil and gas companies, but interest has grown significantly since the SNE discovery.
"If the oil and gas potential of these reservoirs is confirmed, Senegal's oil and gas industry has the potential to radically transform the country," it said in a country profile report.