FAR did make a gain/profit on the sale to Petronas.
Say for example FAR's cost base for the 80% share was $15million (roughly FARs carry of Erin).
FAR then onsold 40% to Petronas for say $25m (roughly Petronas carry of FAR).
The gain would be $25m less $7.5m (half of the original cost base) = $17.5m.
Say 30% tax rate on the gain under Gambian laws would result in approximately $5m of tax.
Just because FAR didn't make a cash profit wouldnt preclude it from tax (in Australia anyway). FAR effectively saved itself $17.5m in drilling costs. FAR bought something, then sold it for more at a later date.
No idea how the Gambian laws have been drafted though.
It is interesting that the article quotes $5m in Capital Gain Tax and the above calc equals $5m. If you swap the words Petronas and FAR in a few of the sentences in that article, the article does make more sense.
FAR Price at posting:
6.5¢ Sentiment: Hold Disclosure: Held
