The find, which is expected to be a commercial development, created some broker excitement and spurred a 36 per cent jump share price rise in a risk-averse market.
FAR said its 15 per cent-owned SNE-1 well discovered a 95m gross oil-bearing column with net oil pay zone thickness of 36m.
In the market release, FAR chief executive Cath Norman gave no indication she had any doubts about the quality of the find.
“The SNE-1 discovery is a company-making event for FAR, following our earlier oil discovery in the FAN-1 well,” Ms Norman said. “The SNE-1 discovery has the potential to lead to a large stand-alone development and is an important step forward in establishing an entirely new petroleum province which would be transformational for Senegal. It is incredible that FAR has made two very important oil discoveries with its first two Senegal wells.”
FAR shares rose 3.6c to 13.5c, giving the company a market value of about US$420m, but short of its record closing price of 14.5c, which was hit a month ago when it revealed its first discovery.
Bell Potter head of institutional equities Angus Aitken thought the stock should have pushed higher.
“FAR and their partners have found an entirely new petroleum system out here, not just a few big blobs of black oil,” Mr Aitken said.
“While the entire E & P (exploration and production) sector in Australia has been a basket case for ages with duster after duster, FAR are clearly on to something very, very large here.”
Ms Norman said the latest well proved petroleum had migrated from where the first well had proved it was, boding well for more Senegal prospects in the FAR portfolio.
FAR has financed the drilling by bringing Cairn Energy in with a 40 per cent stake and ConocoPhillips with a 35 per cent stake.
Business Review
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