APCL hopes to finance the balance of its Cote d’Ivoire well through the conclusion of farm-out talks in Senegal-Gambia and there is good reason to be optimistic about this. We understand that the process has been highly competitive with APCL currently speaking to multiple interested parties about a range of possible deals (from stakes in individual blocks to a holding across the entire acreage position). Importantly, APCL’s back costs across the four Senegal-Gambia licences totals more than US$60m and, with the company seeking to shed 60-70% of the equity, even a ground floor farm-out would likely include a material cash component (potentially seeing APCL recoup US$36-42m of historic costs). On the back of recent success, industry interest in the Senegal basin has increased sharply, despite the collapse in oil prices, providing the ideal backdrop for APCLs farm-out talks and, in our minds, a deal is just a matter of time (likely in H2 2016).
