Now that it looks like we have put out the trash for good, lets look at reinvigorating some quality posts.
The biggest question bugging the forum - Why has FAR not reached its potential?, or current valuation of ~21-25 cents
In my eyes for a few reasons;
A. Retail investors are in disbelieve that they have multiplied their investment by 2-4 times and as this 'never' happens have headed for the doors taking their profits with them. (I have no problem with this). I know of a couple long termer's that have done this, also a couple friends.
B. The markets are terrible right now. Both locally and Globally.
C. Nervousness around Oil prices and what Opec will do in the coming weeks.
D. The find is still a speculative find making FAR a speculative stock - this means that the institutes cannot buy FAR being deemed a speccie. I firmly believe that this is the biggest reason the retail investors leaving have not seen the gap filled.
So whats the good news
1. FAN-1 I believe will shortly be confirmed as a Commercial find - The following exert "London-listed Cairn has given potential oil-in-place numbers at FAN-1 as 250 million barrels in the 90 per cent case and 2.5 billion barrels in the 10 per cent case, with the most likely number 950 million barrels".
Cath then states "Ms Norman signalled FAR was assuming the upper end of that range, given positive results so far."
P.S If we are confirmed in the upper range of this, per the statement from Cath - Fasten your seatbelts - by my estimate a 2.5 billion barrels in FAN-1 alone should be worth around $1.61 to FAR objectively.
2. Once we are confirmed as having a 'Commercial find', then the institutes will be able to purchase FAR, this will drive the price not only up, but open up investment into FAR by the 'big money', we have already seen FARJOY buy into 10% of the company, once we are commercial, I believe he will be eclipsed by the big funds. This is for two reasons - the published find will be larger than the conservative estimates but will also mean we move from speccie.
Once work on the FAN-1 well is complete, the drilling rig will move to the SNE-1 well on the same block. Analysts said that prospect has been 'de-risked' by Tuesday's result.
SNE-1 is looking for un-risked 550M barrels, objectively this should drive 30 odd cents to FAR's share-price.
4. FARMOUT of L6, from recent presentations, Cath has confirmed that Kenya L6 Offshore will be FARMED-OUT by the end of October, L6 is the Jewel in FAR's crown and the reason many have invested into FAR in the first place. L6 offshore on an unrisked basis has more than 3.5B Barrels exert - http://www.far.com.au/wp-content/uploads/2013/11/20140114-Hartleys.pdf
6. One risk for FAR, is its current cash reserves - I believe that upon confirmation of point 1. We may see offers similar to what KOSMOS received for its stake in the Jubilee find - http://www.bloomberg.com/news/2010-...offer-5-billion-for-kosmos-jubilee-stake.html - the find may not be as large as Jubilee, but the offer I would believe to be significant, with Conoco having first right of refusal, they certainly have the means cash wise.
Upon FARMOUT of L6 and WA, we should receive generous reimbursement for back costs which will assist greatly.
Thoughts around the road forward
1. HOLD your shares - do not sell. FAR is on the verge of having its objective value unlocked. Why do I say Objective value? The definition of objective is as follows;
objective
əbˈdʒɛktɪv/ adjective
of a person or their judgement) not influenced by personal feelings or opinions in considering and representing facts
Fundamentally the shares to date have been driven by retail investors with the exception of FAYJOY, therefore the emotional roller-coaster has been running strong, meaning people to sell out once they reach their thresholds and points A,B and C above.
DO NOT let the downramper's influence your decisions - believe in the facts and the company. There are many examples on this thread of posts that are trying to make you sell up. BLINGGIRL is the best example of this in terms of the amount of effort that was put into negative ramping.
2. Be Patient - the share-market has been spoken of as a vehicle to transition money from the patient to the impatient
In Summary and my thoughts
I personally believe that upon our find being deemed commercial, FAR will be revalued significantly. The significance of this revalue is that it should allow the stock to reach its objective valuation. We will move from being a 'speculative' stock, by the institutes - meaning that they can purchase the stock and will drive it closer to an Accountants valuation of the stock, not a retail investors based on sentiment.
Upon revaluation and a top up finance wise, we should be eligible to be inducted into the ASX200, the significance of this is that 30% of the ASX200 is owned by super funds which invest here. This will mean a significant uplift in FAR, not withstanding the exposure this will generate for the company.
FAN-1's results will take weeks, meanwhile L6 and WA should be confirmed by the end of October. SNE-1 will be drilled and results out I would say by mid December. The next round of ASX-200 submissions is December.
My final point, all of the above is imminent, the upside therein is MASSIVE, hence the name of the thread being "FAR's Christmas present".
All the best to all, especially the long-termers.
I am trying to post less, given the quality of the thread diminishing - that said - learn to use ignore , This will be my last post for a while.
Here's wishing to a great XMAS. 11 weeks to go.
P.P.S whilst I talk to objective values - there is every chance that FAR may be acquired in full, the prospects of FAR in my honest opinion have all been slightly de-risked given FAR's geo skills being trued up.
FAR Price at posting:
12.0¢ Sentiment: Buy Disclosure: Held
, This will be my last post for a while.
(20min delay)