Thoughts on shorts, page-153

There is a risk of a CR but I dont see that as a huge risk until Samo is drilled.

I think it is too late for a FAN or Saloo/Bambo well to be drilled as part of the current Samo/Drillmax program and with $30-$40m in the bank and the cashback structure of the petronas deal (where FAR get more cash the cheaper the drill is completed) mean there are no imminent cash needs.

Samo wont be drilled again unless they have good reason to.

It would be nice to have more of SNE/FAN than 15%/13.7% but the flipside is we only have to pay 15% of any additional FAN drilling cost, 15% of say $60m is $9m. Not going to break the bank even with a decent overrun.

Saloo/Bambo - I cant see that prospect being drilled in the next 6 months. Not drill ready yet, JV partners would need to agree to it, permitting, ordering long lead items, planning the drilling etc etc, deill ship available by then? Erin?. With 40% equity, this could be farmed down again to reduce exposure although probably not on such attractive terms as Samo.

Sure CR's have helped FAR become the company it has and got FAR through the oil price drop and SNE drilling BUT the dilution on a near industrial scale at low prices has significantly reduced LT shareholder returns. Any CR before Samo reduces the upside for any current holder and should be avoided at all where possible. I would much rather raise at 8c and lick my wounds if Samo fails, than at 11c now with the upside of Samo still ahead.

A cap raise at current prices with Samo still ahead would be a HORRENDOUS result in my opinion. A few people have seen a few pretty pictures of Saloo along with some reasonable numbers and seem happy to raise now. Lets deal with Samo first, which could be a monster compared to SNE, Saloo, Bambo, Samoa, Bimbo, Simba and Sumo.