*FAR Price Target Cut 40% to A$0.06/Share by Morgan Stanley, page-262

Aside from SNE there is really only one Elephant left in the room and thats finance, it's a big Elephant but so is SNE and we need one to take advantage of the other..putting PE aside as it's a coin toss ...we are left looking for a solution that preferably has no further share dilution or WI dilution, but dilution through an initial reduction in income , that could only happen through debt in any number of forms , pre payment of future Oil production or more likely a combination of both.

The key IMO lies in the borrowing required to reach first oil , once you have income debt is much easier to manage which leads me to the JV funding ..IMO it will be the cheapest form of debt and probably come with the most lenient structure regarding interest and capital payments .
To join the JV funding FAR would have to show that it has other funding set up for the balance required and that appears to have already been sorted..of course FAR may have a way of doing it without a JV facility , but I doubt if they would want to anyway although they have alluded to it.

IMO it's possible to start production with as little as 3 initial 500 series production wells, 1 400 series plus a similar amount of injectors ( perhaps 7-10 in total initially), and then continue adding wells and ramping production after income has started ( the 500 series sands are believed to be able to flow initially at up to 30,000 Bopd).

We know thats what they want to do, but the amount of wells required is unknown and that itself would be determined by their performance. One thing is certain it's no use drilling wells beyond the capacity of the FPSO to handle them. It will take 12 months or so to ramp up to maximum production anyway.

That scenario could see the funding required to first oil in the region $1.5b or half the expected total costs of Phase 1 bringing in the possibility of using a JV funding facility alone to first first or thereabouts and alternative funding after that. JV funding was expected to be 50-60% of the total Phase 1 costs .

Anyway I'm reasonably relaxed about funding despite the amount required and the above would be my prefered option, all JV participants will be wanting income as soon as possible and in the most cost effective way regardless..

A JV facility that capitalised initial interest and then had repayments starting after first oil would be perfect thanks...

Cheers Whisky