Ann: Quarterly Cashflow Report, page-22

Mcwilly,
From page 1 of quarterly: "

The unscheduled rig maintenance has resulted in a revision to the estimated cost of the two wells and currently FAR estimates that its future funding contribution for the drilling program from its existing cash reserves will be approximately $24.2 million (US$22.5 million).

Until now there was a general assumption that, as a result of the farmdown which left with a 15% interest, FAR would only be in for 15% of overrun costs. Clearly it now appears that this is not the case. The total cost of the 2 wells was capped at 196mil ( meaning, any costs beyond the 196mil, will be for FAR's account). The terms of the farmout agreements were never spelled out to investors in "black & white" and the provisions (and effect) of the terms of the agreements now becomes more transparant.

As I say, any more hiccups in this or the second well could have serious consequence.

Agree with earlier poster - bad reporting when using words like: "The Company can comfortably cover these costs with their current cash reserves.:" It's like when they first reported on the Cairn farmin when they advised that the cost of the first well (80mil) will fall well within the agreed 80mil cap.
First target in first hole not reached yet and most of cash balance is already accounted for. So much drilling still to be done. Sadly FAR is now on very shaky grounds.

Regards