The champagne corks were popping at FAR Ltd. as the Melbourne-based junior oil and gas explorer, in partnership with ConocoPhillips and Cairn Energy Ltd., toasted the first discovery offshore Senegal in 20 years.

The Cairn Energy-led joint venture announced a 400 MMbbl oil find from the Cajun Express semisubmersible as well as a potential upside of 800 MMbbl at the FAN-1 well. Within a month, it announced a second discovery at the nearby SNE-1 well, where similarly high-quality 32˚API oil was recovered to surface.

Praise may be premature considering that the proof of production is in flow testing. However, preliminary estimates at SNE-1 range from 150 MMbbl to 670 MMbbl (with 15% net going to FAR), stimulating a similarly buoyant mood to the earlier success.

Three years after taking the reins at FAR, a company hitherto treading water, Cath Norman had the satisfaction of seeing its stock soar more than 300% on the back of the Senegal discoveries. More importantly, the company’s peers, and the industry at large, have stood and taken notice of a potential fairy tale in the making.

Norman shared insights of the company with Hart Energy’s Oil and Gas Investor Australia.

Senegal reads like a Cinderella story for FAR Ltd. What was the magic ingredient behind these two discoveries?

There is no real magic. The discoveries are the result of strong technical work by the FAR team to identify and map the opportunity, which we immediately saw as enormous. Cairn Energy and ConocoPhillips shared our assessment. It was a very compelling story that led to both of these companies funding the first $200 million of expenditure toward drilling the first two wells.

Yet these were the first wells drilled in 20 years in the country. Why the reluctance to explore offshore in this area?

The prospect sizes that we have mapped offshore Senegal are large and hence require a large volume of oil being produced to fill them. As an industry, the understanding of the deepwater source rock offshore West Africa is only beginning. Certainly for the FAN-1 prospect—until the Jubilee Field was discovered offshore Ghana in 2007—there had been very few wells drilled offshore Africa in this deepwater fan play.

How important from a technological perspective was the influence of partners Cairn Energy and ConocoPhillips in these discoveries?

FAR developed these play concepts before taking them to the market to seek joint venture partners to share the risk. Cairn Energy and ConocoPhillips had the vision to see the potential and have been very important in taking the initiative and helping to fund the wells. Their confidence in FAR’s technical work has rewarded them nicely. There is no doubt that a small company like FAR has benefited immensely from the experience of both companies, especially ConocoPhillips, during the drilling campaign.

You have been at the helm of FAR for three years now. What was the biggest challenge you confronted when you first came in as managing director?

When I became MD of FAR, the company was much smaller and had an extensive exploration portfolio that required significant near-term funding for both 3-D seismic surveys and drilling. Like all small companies, we faced a significant funding challenge. Access to capital is the key challenge for small companies and never more so than in this tough financial environment. But FAR has a very strong technical team, and the excellent work of that team allowed us to attract high-quality joint venture partners like Cairn Energy and ConocoPhillips to fund the lion’s share of our exploration in Senegal. The activity has allowed us to raise the necessary cash to fund our other work programs.

The proof in the pudding for the oil and gas industry is commercial flow-testing. To date, is there any indication of what appraisal drilling might yield in the future? And were there any moments when you doubted the success of FAN-1 and SNE-1?

There is always risk in drilling wildcat exploration wells. Managing that risk is the key to success in offshore exploration. Our technical work reduced the risk to acceptable levels sufficient enough to attract high-quality partners to share the drilling risk. We have enjoyed two fantastic successes, and now we face a new set of risks in the appraisal program. The completion of the two wells has satisfied our current work program obligations to the government of Senegal until early February 2016, and the formal declaration of the two discoveries to the government means that we have six months to reach agreement on an appraisal program, so this process is only in its early stages. [Editor’s note: FAR announced it would submit its evaluation program to the government in April 2015.]

FAR does have sizeable acreage in Africa. What does the company like about oil and gas prospects in this continent?

Three years ago when I came on board with FAR, we rebranded the company as an African-focused exploration company. We already had a large foothold on acreage in Senegal, Guinea Bissau and Kenya, and the opportunities presenting themselves in the African continent were wide. Our team has broad experience in working in Africa, and we were attracted to the fact that there were oil and gas discoveries made historically that had been overlooked in the rush to follow success in other parts of the world. Application of new technologies and new geological models has helped to unlock the prospects of much of Africa over the past few years.

African naysayers frequently cite sovereign risk as the greatest obstacle to success in Africa. What is your retort to those skeptics?

It is all about risk management. Discovering major new oil fields means you have to look farther afield. Senegal is an excellent place to operate, and we feel very comfortable there.

Assuming appraisal drilling is a success in Senegal, what’s next and when could the fields start producing?

Let’s not get too far ahead of ourselves. An appraisal program will be likely to commence late 2015 or early 2016. As both discoveries are appraised and declared commercial, we will commence the development process. Both discoveries are very different in nature, and it could be that development in one field could be more straightforward and faster than the other.

Dale Granger, editor for Hart Energy's Oil and Gas Investor Australia, can be reached at dgranger@hartenergy.com.

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