Hi Aqua, ALL,
We are at the pointy end of an event that will either be a company maker or (due to what seems to be a massive cost blow-out on the first well) a company breaker.(see e.g.TPT and NEN). Admittedly FAR holds additional interests (e.g. Kenya) but how much will be left in the koffers to progress those projects in the event of 2 dusters. In this regard I note with some concern the section in Phillip321's post which states:
"P.S on L6 farm-out I'm thinking it's now late Oct regrettably (for reasons which will become clear soon enough). FAR understands the need to get it out there before two dusters but it is dragging".
What does this mean? Phillip, perhaps you might want to elaborate on the reference "FAR understands the need to get it out there before two dusters but it is dragging" Did you get the feeling that they now actually envisage "dusters"? Or was it more a case that they (management) acknowledge the importance to get L6 farmout in place before "completion" of the Senegal drills?
And why October? - that sort of coincides with the completion of the 2 wells? Are they waiting for the results which, if positive, would place FAR in a stronger bargaining position on L6? According to Phillip that does not seem to be the train of thought of FAR management - rather, they want to get the farm-out in place to keep the balance sheet strong to move forward on kenya, regardless of the 2 Senegal dusters.
Additional to the above, and referring to the transcript of Cairn's presentation, I must admit that I too, from first instance, interpreted the CEO's words: "So we’re pretty confident that it’s there. What you can’t tell without drilling it though is how good, how much and just exactly where it is within the well. But this will tell us once we have finished." to be referring to ongoing drilling to find/explore/identify source rock and geological structures. Did they have oil shows and nothing more and thus trying to push further only for the purpose of getting more info on geological structure? To many questions and no answers>
Of course, contrary to the less optimistic outlook that could be gleaned from the above, there is also the other side of the story.
Why would they continue with drilling, even after a massive cost blowout, unless they have found something meaningful. I agree with Phillip321 that "oil shows" is just not going to cut it at this stage. Maybe
Then there is the info provided by JP on the ongoing drilling progress which, if I read it correctly, has given JP a pretty strong level of confidence - until of course the moment when "tweet tweet" advised that the are "pulling up and hop over" to the other well. Again many questions:
What is meant by "pulling up". To me that suggests packing up everything and leave - not to return. Could be wrong (pulling up stumps/pulling up camp = done, finito);
Did they enter the "source kitchen and need not drill any further because they've seen enough in FAN1 and wanted to see what's going on in the second well now that they've found the source kitchen?. Surely, if FAR's drilling program for the 2nd well was mostly predicated on flows from the source kitchen, the one must assume that they either found the source kitchen in Fan1 or, alternatively , significant oil shows that causes them to drill the 2nd well as well. Or, due to the fact that the top section was drilled, and even though there are no oil shows in FAN1, they decided to in any event drill a bit further in Well no2 seeing that they already started.
Then there is Cairn's share performance on Londen S/E which has not been flash over the past weeks - certainly nothing to suggest that they are "on to something". I can't believe that a "tight hole" could be that tight, so much so, that no trader in the world did not get a sniff of what's happening with the drilling program. The SP has been trading lower and lower over past couple of days.
All in all, this Senegal exercise has turned out to be a perfect environment for massive speculation which is mainly due to FAR not providing at least some sort of general update without necessarily having to compromise the finer detail of drill results.
Sadly, this uncertain environment has also created a 'breeding ground" for all sorts of posters who post for one or two reasons only (you can decide what that is) - Those of us who have followed FAR long enough to know what it's future prospects are need to ignore BS that is likely to creep in at this stage.
We can only HOPE for the best.
Can anyone comment whether Cajun has moved on. Last night when I checked, it was still at the FAN1 location but the last update was as at 21/8/14 and it might have moved overnight.
GLA.
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