Hi All
As Paul Keating - aka The Trump (no, not that one) - famously said: "This is one for the true believers."
... and a sharp poke in the eye for those who decried soccer balls and school halls as a waste of FAR's energies.
Those social programs, and the goodwill they have generated, have come home in spades with FAR's titles to Blocks A2 and A5 in The Gambia. Wrong country, I hear the cynics cry, and they are wrong again. Senegal and The Gambia are joined at the hip and Mackay Sall's fingerprints are all over FAR's title deeds. If I were to be cynical, I'd say this was by way of compensation for his inability to deliver FAR PE on SNE, but indications are that it runs deeper than that.
Do not for one second underestimate the significance of FAR's coup in acquiring A2 and A5 from under the noses of the Sisters. Malcy tells us they are crawling all over this and while their cheque books dwarf FAR's, it seems their influence does not (yet, at least). FAR is being rewarded for a decade of commitment to Senegal and for its formidable technical capabilities that enabled it to find oil - and shed loads of it - where others could not. To assert otherwise is nonsense, since orthodoxy would see The Gambia favouring Big Oil with this their most crucial asset.
The bookmakers would surely have CNOOC at prohibitive odds to farm in to our newest blocks, but braver punters might lay off each way on a couple of the other majors, all of which will be champing at the bit to get to the mounting yard. Woodside would be at hundreds.
As to the blocks themselves, I invite farjock to speculate, but to this untrained observer Sama would appear close to a cert itself, being on trend with - and just a 'k' or two removed from - the bountiful SNE. Cath has already said FAR can see those 400 sands continuing across the 'border' and getting closer to the 200 million-year-old river mouth that seems likely to be the source of several billion barrels of oil. It speculates that those sands are likely to be even richer as we progress southwards. The pity is it looks likely to be 16 or so months until we find out. Why so long? the untrained mind wonders.
Lastly, does Bell Potter know anything we don't? Why does it believe FAR will likely win PE? Or is it merely pumping the stock to its clients (who seem singularly uninterested in buying it!). And if it's true that arbitration is all upside, no down, then why would PE be weighing on FAR's share price? More likely, I think, that Donald Trump and US Energy Dominance is the culprit. Really, hope as we might, it is difficult to see oil rallying significantly in the medium term, let alone by the fourth quarter as an increasingly desperate Saudi Arabia claims.
Today is yet one more good one for team FAR, which is steadily and methodically ticking the boxes Big Oil requires to reach the risk/reward frontier that will elicit an offer - or hopefully offers - of some sort. My money is still on corporate activity to deliver FAR its reward. Unless there is an oil price miracle, it is hard to see the share market rewarding anyone whose business is finding or producing the stuff.
And hard to see FAR achieving a Hardman-like price. Different times, different futures. I will be well satisfied with half the price I hoped for when first investing in FAR 30 months ago when oil was $100. I fear even that might be a stretch target.
OOO
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