Multimillion dollar drilling campaign envisioned for Guinea-Bissau

The company, which has headquarters in Australia, said the government of Guinea-Bissau signed off on an April agreement with the country's national oil company, Petroguin, to improve its interest from 15 percent to 21.42 percent. In addition, FAR said it was awarded a reduction in royal payments owed to the government and a three-year extension of its licenses to 2020.

FAR Managing Director Cath Norman said the prospects offshore Guinea-Bissau are similar to those at its flagship holdings off the coast of Senegal.

"FAR has previously mapped a 470 million barrel prospect called Atum on the Guinea-Bissau shelf edge in a play similar to the large SNE discovery made by FAR and it's Senegal partners in 2014," she said in a statement.

Hailed as one of the largest discoveries when declared in 2014, the companies tied to Senegal say that SNE, combined with other exploration developments off the country's coast, may hold more than 1.5 billion barrels of oil.

FAR Ltd. and British company Cairn Energy, the operator, in early August announced an oil discovery at the so-called Sirius Prospect in waters just to the north of SNE, the 11th successful well so far in the campaign.

Cairn has a 40 percent working interest in three basins offshore Senegal, Australian energy company Woodside Petroleum holds 35 percent, FAR Ltd. has 15 percent and the national oil company of Senegal holds the rest. The joint venture partners are at odds over who would serve as the operator for some of the basins.

For Guinea-Bissau, FAR is working with joint venture partner Svenska Petroleum Exploration, a Swedish company. For its two prospects offshore Guinea-Bissau, the companies have outlined a minimum $3 million capital campaign to drill one exploration well in each of its two license areas.