What we know and what's next?, page-53

OK Aqua, I oblige.
The market doesn’t lie in the long run and the SP of $0.10 and market cap of $300m is where it should be. Yes a market cap of $300m - a lot of money. A valuation:
FAR’s investor presentation of 14 Nov quoted $6.50/bbl value for Jubilee (at $100/bbl oil), so as good a number as any to use.

1. 330 MMb Contingent Resources Albian Sands discovery value, with 50% risk factor = 330 x 6.5 x 50% x 15% = $160m or 5c/share
2. Fan-1 discovery, say another 300 MMbbl, but assuming 30% risk (commerciality) = 300 x 6.5 x 30% x 15% = around $100m or 3c/share

So total value of the 2 discoveries = 8c/share

1. Value of undiscovered oil ? a guess, but say somewhere between 2c – 5c/share. No value attributed to East Africa or Australia due to high risk IMO.

So total value is say 10c/share.
They key thing to factor in is the country risk. The Senegalese government will be looking for their share of the success here. A good example is the Gambians next door and their attitude to the African Petroleum whom they brand as speculators. The Ugandans slapped a restrospective Capital Gains tax of several hundred million dollars on Tullow when they sold to Total/CNOOC.
And then theres the oil price which could go as low as $50 according to some of the pundits
I trust this meets your requirements.
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