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News: FAR UPDATE 1-Woodside taps into big oil find off Senegal for near-term growth

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    • Woodside expanding push into West Africa
    • Gains stake in potential 1 bln barrel oil resource
    • Woodside has been short of opportunities for growth

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    MELBOURNE, July 14 (Reuters) - Australia's Woodside Petroleum (WPL) is expanding its push into West Africa, agreeing to buy ConocoPhillips' deepwater stakes off Senegal, including one of the world's most promising recent oil finds, for up to $430 million.

    The move brings a deepwater expert into the SNE field off Senegal and removes uncertainty over its ownership, which may help speed up development of a billion barrel resource that is expected to start producing within the next five years.

    The acquisition includes a 35 percent interest in the 560 million barrel SNE deep water oil discovery and the FAN oil discovery further offshore, with Woodside gaining the option to become operator for development and production of the fields, for what one analyst said was a cheap price.

    "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," Woodside Chief Executive Peter Coleman said in a statement.

    The deal, for $350 million plus payments of up to $80 million, is key for cashed-up Woodside, as it is short of growth prospects after scrapping multibillion dollar plans to develop gas off Israel, postponing plans to develop the Browse gas project off Australia and being spurned in a takeover offer for Oil Search (OSH).

    "We see the deal pricing as an attractive entry point for Woodside given that the 560 million barrels-plus is relatively well appraised," RBC analyst Ben Wilson said in a note.

    Woodside has already targeted the area off Senegal for exploration, with a stake in the AGC Profond block in a zone between Senegal and Guinea Bissau.

    ConocoPhillips flagged last year that it was looking to sell its deepwater exploration stakes and said on Thursday the sale of the Senegal holding was an "important milestone".

    The fields' operator is currently Britain's Cairn Energy Plc , which owns 40 percent and is looking to sell down its stake to cut its funding obligation for exploration and appraisal.

    Australia's FAR Ltd (FAR) owns 15 percent of the fields and Senegal's state-owned Petrosen holds 10 percent.

    The partners all have pre-emptive rights to ConocoPhillips' stake.

    FAR Ltd Managing Director Cath Norman could not be reached immediately for comment. She told a group of reporters on Wednesday that the SNE field could start producing as early as 2019 if plans go ahead for a floating production operation.

    FAR put its shares on a trading halt after they fell as much as 20 percent on the back of the Woodside announcement.

    Woodside's acquisition of a 35 percent stake in the Senegal fields effectively values FAR at around A$0.07 a share, where its shares last traded.

    Woodside shares fell 0.5 percent, holding up better than other oil producers on a day when oil prices were down sharply.

 
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