FAR TV Live Chat with FAR CEO Catherine Norman, page-82

Hi Oddoneout

"Negotiations surely are not based on today's price and just as surely can't be based on a future $115 spike. Somewhere in the middle must be the answer and I think without committing to a dollar figure she might be able to give us a good clue."

IMO at this stage I doubt the price of oil will be part of negotiations as they will proceed with appraisal regardless. The price of oil would become a factor when a decision has to be made on proceeding on to production and that could come after the first appraisal well or they may need more. That being the case the oil price towards the end 2015 or later plus the future outlook would become the focal point for negotiations.

The flow rate from any appraisal well would give them a very good idea on how the wells will perform it also firms up the size of the resource and the likely economics. I note that the first two Jubilee appraisal wells had an initial flow rate of around 20,000Bopd each, now that would light the shareprice up...

Cheers Whisky