Jefferies snares $US2b SNE project mandate, page-94

This time around there's Industry interest in the region, so the equity sale should work out fine if handled properly.

1) BP/Kosmos have the rig Ensco-DS12 at Yakaar-2 appraisal 2 days ago and KOS plan to sell down 20% of their equity.

2) TOTAL-Petronas r currently drilling in Senegal at JAMM-1X with the Pacific Santa Ana drillship. So there's a bit of action.
TOTAL look likely to pick up Anadarko's African portfolio for USD 8.8bil, ie 2P-1.2 & 2C- 2 Bboe (roughly 360 mmbbls Oil & apprx 17 tcf gas). This acquisition should give them apprx 2P-120 oil reserves in Jubilee & TEN & the rest of Oil is from Onshore Algeria where they are JV partners. I hope they can pick up Tortue & SNE as this sort of projects favor the majors who can ride the commodity cycle.

As for SNE, the number is 483 mmbbls gross, ie 230 & 253. FAR r rounding this off to apprx 500 mmbbls in their March presentation for the sake of consitency instead of 640. Cairn's net 2C is 186.3 mmboe, whilst WPL's 2C is 160.5 mmboe.

So apply 15% x 483 = 72.45 mmbbls net to FAR at say USD7 & USD3.50. Roughly USD 375mil or AUD 528mil before tax or 8.4c/sh value from the sale. Add that to the 5.5c SP, so that's the overall value creation from the sale which should b net profit after prior expenditure & any taxes etc. Only unknown is the timeframe, which should b few months easy to sort out any EOI's and SPA from any forthcoming Bids & to close the deal.

FID should b next & SimonT clearly mentioned last Sept about equity sale closer to FID so not a big surprise since contracts etc r in place for drill rig, FPSO, Subsea gear etc. That's about it.