Woodside goes on African safari in Senegal.


Woodside has bought ConocoPhillips’ exploration stake in Senegal, acquiring a 35% stake in the SNE and FAN deepwater oil discoveries and the option of becoming operator, for US$430 million.
The deal gives the Perth-based company exposure to a potential 560 million bbl oil discovery, which Woodside appears to have picked up for a significant discount at about US$2.30 per barrel to the US$7 per barrel valuation of RBC Capital Markets.
Melbourne-based FAR Energy, which holds a 15% stake in the Senegal venture, was trading 13% lower at 7.3c in a trading halt. UK-based Cairn Energy holds a 40% stake and has been looking to reduce its exposure to the west African discovery.
ConocoPhillips had announced plans to divest its deepwater portfolio and earlier this year Woodside chief executive Peter Coleman had signalled his intention of targeting quality deepwater acquisitions in Africa.
“We are taking advantage of our balance sheet to acquire a world-class asset that fits well with our capabilities, offers significant future upside in exploration and line-of-sight to near term oil production,” Coleman said yesterday.
“It builds on our agreement to acquire a 65% interest in the AGC Profond exploration block located to the south in the Senegal-Guinea Bissau joint development zone and extends our regional focus in West Africa.
“We look forward to working with the Government of Senegal and joint venture participants Cairn Energy, FAR Limited, and Petrosen, the Senegal National Oil Company, to progress the commercial development of SNE and any future discoveries.
“Woodside will bring to the joint venture expertise in deep water drilling, development and operation of subsea infrastructure and floating production storage and offloading vessels,” he said.
The deal is subject to Senegalese government approval and is expected to be finalised by the end of 2016.


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