Vote of confidence for Senegal's oil potential

A new infusion of cash is a testament to the strength of emerging reserves offshore Senegal at a time when finances are hard to find, FAR Ltd. said Friday.

The Australian company said it raised $60 million before expenses by issuing more than 705 million shares, a placement FAR said was "significantly oversubscribed."

FAR started drilling into basins off the coast of Senegal two years ago, when the price of oil was about 60 percent higher than the current level. Managing Director Cath Norman said the new cash was a statement of confidence.

"It is a testament to the quality of the Senegal project that FAR has successfully completed this capital rising in a tough market for oil explorers and developers," he said in a statement.

This week, the company said an independent assessment of the SNE field off coast of Senegal found the reserve estimate to be about 20 percent higher than expected at 561 million barrels of oil. A string of exploration successes at the field meant the company was able to plan for more drilling.

The company's partner, Cairn Energy, said assets in the deep waters off the coast of Senegal could hold up to 670 million barrels of recoverable reserves.

In its March address to shareholders, FAR said a "tremendous" amount of work is necessary to assess the full potential for offshore Senegal, though development drilling is on pace to begin in earnest next year. The company said much of the area remains unexplored, but has the potential for an "enormous" amount of oil.