There are many possible outcomes for FAR in Senegal and one that...

There are many possible outcomes for FAR in Senegal and one that has been widely canvassed is a takeover by another oiler. Another is the sale of the Senegal assets. A takeover seems to be the most likely outcome. At least Malcy thinks so. So do others.

In my view it would be a pity for the current FAR team to be disbanded upon takeover of the company. They appear to have the collective talent to explore other opportunities that have potential for finding oil and they are highly regarded by some very knowledgeable shareholders.

Here's an idea: Prior to any takeover approach, FAR could split off the assets that are NOT involved in the JV (Djiffere, Guinea-Bissau, Kenya etc) into a separate company. Let's call it FAR2, for ease of discussion. As part of the process of separation, FAR shareholders could be given shares in FAR2 in some agreed ratio to their holdings of FAR shares at a stipulated date. E.g. one FAR2 share for each 20 FAR shares held.

In the event of a takeover of FAR, the assets of Djiffere, Guinea-Bissau, Kenya etc would thus be quarantined from the takeover and the FAR team could continue their good work in those high potential territories.

This seems to me to be a cleaner way of handling a takeover of FAR's share of the FAN and SNE discoveries covered by the JV than a sale process of the assets themselves.

One advantage is that the market could transparently and separately value FAR and FAR2, rather than the suitor and target companies horse-trading the value of FAN and SNE. Also, the proceeds of a FAR takeover would be paid to shareholders, rather than being swallowed up in some kind of war chest in the company. (Some might say to enrich management, but I'll try to refrain.)

What does anybody think of this idea?