Path Clear for Woodside to Take Over FAR's Sangomar Stake as Remus Drops Out

Private investment fund Remus Horizons which last week launched a conditional takeover offer for the Australian oil company FAR, eyeing its stake in the RSSD offshore area in Senegal, containing the Sangomar offshore oil development, is now backing out from the FAR pursuit.

In two letters sent to FAR this week, Remus cited citing lack of funding, regulatory issues, as well as lack of proper authorization for the takeover bid as reasons for not proceeding with a formal takeover bid.

To remind, Remus had last week announced its intention to make a takeover offer for FAR at 2.1 Australian cents per share, with the proposed offer conditional upon FAR’s shareholders rejecting the sale of FAR's interest in the RSSD Project to Woodside, as previously agreed with Woodside and FAR, and the FAR Directors confirming that there is no intention to dispose of this interest before the closing of the takeover offer.

FAR has recently agreed to sell its stake in the Sangomar to Woodside, its partner in the project, as the company has been unable to fund its share for the development of the field and has been in default concerning its January 2021 cash call of US$19.9 million for its part of the Sangomar development costs and has until mid-July 2021 to remedy defaults or risk losing its interest in the project.

Announcing its plan to swoop for FAR last week, Remus said it had "a present funding capacity totaling US$400 million of which it has currently allocated up to US$250 million towards the acquisition of FAR and the provision of additional funds to FAR post the completion of the acquisition or through a potential working capital support bridge loan..." 

The company then also said was proceeding to finalize its Bidder's Statement so that it would be lodged by no later than April 28, 2021, with FAR's shareholders' meeting then moved to April 28, to give Remus time to lodge its Bidder's Statement.

Remus Move Collapses

However, come Wednesday, April 21, the whole thing seems to have collapsed, as FAR said that it had received two letters from Remus 'overnight' in which the company said it wouldn't be able to lodge the bidders statement.

See below Remus' letters, as shared by FAR:

1. In the first further letter from Remus, Remus states that it is unable to lodge its Bidder's Statement over coming days. Remus states that this is because it has recently had its registration as a private investment fund suspended by the Guernsey Financial Services Commission. 

2. In the second further letter authored by a different Remus signatory, Remus states that the intended takeover offer was not properly authorized by Remus, that Remus does not have the funding to complete the takeover offer, that the takeover offer intention letter issued by Remus contained a number of factual inaccuracies, and that the Remus Board would not approve a Bidder's Statement.

"In these circumstances, it seems clear that the proposed Remus takeover offer won't be proceeding. Accordingly, the FAR Board continues to strongly recommend that shareholders vote in favor of the sale of its interest in the RSSD Project at the shareholders meeting," FAR said.

Sangomar

The Woodside-operated Sangomar field development, located in the RSSD area off Senegal, was sanctioned in early 2020. The field will be developed using an FPSO to be delivered by MODEC. 

The FPSO will be deployed approximately 100 kilometers south of Dakar, Senegal, and will be Senegal's first offshore oil development.

The FPSO is scheduled for delivery to support the first oil production in 2023 and will be moored in approximately 780 meters water depth. The recoverable hydrocarbon reserves of the Sangomar field total approximately 500 million boe.

FAR has a 13.67% interest in the Sangomar exploitation area and a 15% interest in the remaining RSSD evaluation area.

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