West African oil drawing capital interest

"FAR finished the quarter with $26.3 million in cash and no debt," the company's management team said in a quarterly report on cash flow.

The company, which has headquarters in Australia, is focused almost exclusively on the oil potential off the West African coast. This quarter, it bought into reservoirs off the coast of Gambia, a basin it says could be a net positive for its adjacent operations off the coast of Senegal.

FAR this week announced plans for an exploration well in the southern section of the FAN prospect off the coast of Senegal, which it said would assess the upside potential for improved reservoir quality. In its latest update, the company said the southern FAN prospect holds 134 million barrels of recoverable oil on best estimates. By the company's estimates, more than 1.5 billion barrels of oil may be in basins off the coast of Senegal.

FAR is focused on the broader Mauritania-Senegal-Guinea-Bissau basin. With eight regional oil discoveries so far, the company said MSGB is quickly emerging as an attractive exploration basin.

On top of a debt-free quarter, the company was over-subscribed for a placement of 1 billion shares, generating around $60 billion in capital it will use to fund drilling, evaluation and pre-development programs off the coast of Senegal, and potentially the acquisition of further assets off the Gambian coast.

Management said the placement put the company in a strong position to finance developments offshore and a final investment decision for the parts of offshore Senegal is expected by early 2019.

"FAR is particularly pleased that the offer was substantially oversubscribed especially at the modest discount offered," management said. "It is testimony to the value that is yet to be unlocked in FAR that we have been able to raise this quantum of money in what is still a tough market for oil companies."

Lower crude oil prices have sparked concern about investments needed to meet future demand. The International Energy Agency said Thursday that last year posted 2.4 billion barrels of new discoveries, against a 15-year average of 9 billion barrels.