Mandurah ……………….. agree with what you are saying but one thing ………………….. once the initial results are confirmed say 2Q2015 and SNE is confirmed to be commercial (am assuming here that SNE will be developed prior to FAN) then the appraisal and planning can all be wrapped into one, what we will need from the appraisal stage is confirmation of exactly where and number of production and injection wells there will be, after that they can expand out to confirm the exact size of the field.
If you read the Tullow PDF that I posted you will find that they were still appraising the exact extent of the field even as they were building the production facilities, also note that Tullow achieved a remarkable completion time frame on Jubilee, no doubt helped by the option to modify an extra-large tanker for the FOSP, will be interested to see if the might of COP can achieve the same time frames, I have a nasty feeling they won’t!!!!
Also as SH’s we need to decide what option we prefer as I believe that sometime in the near future we are going to have to decide, I see a few options of which one will be put to the vote as follows:
A total TO – this would mean that as SH’s we get dollars in our hand and FAR as a company ceases to exist!!!
Sale of just Senegal – this means SH’s will most likely get a single dividend payment per share but management will keep say $250m for development of Kenya and etc.
Sale of a portion of the production for funding of the production facilities (business model of Tullow and Cairn) – this would give FAR a cash flow to develop Kenya etc and would see the SP kick up substantially as the field is developed, max SP won’t occur IMO for round 2 to 3 years.
I would like to see everyone start looking at the above scenario’s as one or something very similar to one of the above is going to happen IMO in under 12months (probably 3Q or 4Q 2015)
FAR Price at posting:
9.3¢ Sentiment: Buy Disclosure: Held
(20min delay)