Email response from FAR

Just a little while ago (FAR management hard at it on a Saturday!) I had an excellent reply from FAR to an emailed question regarding the different estimates of resource size used in announcements made by FAR and CNE post FAN-1 discovery.  I won't post the email but I assume that management would want their response to be shared with other shareholders (to avoid having to answer the same questions from many shareholders), so here is a synopsis of my question and the answers I received:

I asked about why FAR and CNE used different estimates for the FAN-1 resource in their post discovery announcements.  CNE used "oil in place" (STOOIP) numbers for its estimates post-discovery which the ASX does not allow so FAR used the pre-drill prospective resource estimates.  Neither represent recoverable resources for which a recovery factor of around 30% needs to be applied.  They said that most analysts are using the P50 of 950mbbl with a 30% recovery giving 317mbbl recoverable at this stage.  We are all expecting a larger number than this and so is Bells and so is FAR given what was said in the quarterly about "additional reservoirs being analysed that will add to net pay".

Most of us would have been assuming this.  They went on to say that after discovery the resource becomes a contingent resource, but that the JV has not yet agreed on contingent resource numbers (obviously because the analysis is ongoing).  Then this:

"FAR will be releasing final net pay measurements and contingent resource estimates once we have received all of the FAN-1 well data. Please note that the sidewall cores taken during logging are being analysed at present and we don’t expect to have this analysis completed for at least another 4-6 weeks".  The FAR person I communicated with said they were heading to Africa tomorrow for a week.  

Nothing we didn't know already I guess but it gives us a clearer idea of what is happening and what we can expect to hear and when.

H