PERTH (miningweekly.com) – Oil and gas explorer FAR will raise some A$80-million through a fully-underwritten share placement to institutional and sophisticated investors to fund its exploration and development work in offshore Senegal, as well as the anticipated acquisition of a block in Gambia.

The company will place one-billion shares, at a price of 8c each to raise the capital, with the placement shares representing around 18.3% of the company’s enlarged share capital.

The placement price represents a 4.8% discount to FAR’s last closing price on April 4, and a 3.5% discount to the company’s five-day volume weighted average share price.

The shares will be issued in two tranches, with the first tranche raising around A$54-million. The second tranche, which will raise A$26-million, will be subject to shareholder approval, with a general meeting scheduled for May 15.

FAR MD Cath Norman on Thursday said the cash raised will fund the company through its expected work programme in Senegal for 2017 and 2018.

FAR also recently agreed to acquire an 80% working capital in blocks A2 and A5, in Gambia, from US-based Erin Energy Corporation, for an upfront payment of $5.18-million and funding of up to $8-million of Erin’s share of the cost of an exploration well.

FAR’s share of the cost of the exploration well is expected to be between $25-million and $30-million.

Under the agreement with Erin, the well can be carried out in either block A2 or A5 before the end of December 2018, or later if the current licence periods are extended.

Blocks A2 and A5 are adjacent and on trend with FAR’s 2014 SNE-1 oilfield discovery. Since the drilling of the SNE-1 well, FAR has drilled five successful appraisal wells on the SNE field and increased the field’s best case 2C contingent recoverable oil resource to 641-million barrels on a 100% basis, according to FAR internal estimates.