The Media Release FAR wanted to make
Melbourne, 12 December 2014
The world's most successful oil exploration company, First Australian Resources, today announced confirmation of a massive new oil province off the coast of Senegal, West Africa.
Having already announced the company had defied one-in-six odds to find a stand-alone commercial development in deep water, FAR trumped this a month later with news of the World's biggest discovery for 2014 in friendlier shelf waters within pipeline distance of an existing refinery.
Even before these two risky but well-researched wildcat drills, FAR had expressed the view that the untried province might contain 3.5 billion barrels of oil in 11 prospects. Such, though, is the strength of the first two discoveries - and the pointers they give to a massively productive source kitchen - that even this estimate is likely to be grossly under-estimated.
FAR's major shareholder is of the view the real number could be almost four times that and Managing Director Cath Norman said the company did not disagree.
"I have already described the finds as enormous, potentially company making and important to Senegal. Our major shareholder unhesitatingly bought at the top of the market to block any pre-emotive strikes on FAR before we can prove up the substantial value we have already unlocked for shareholders - never mind the massive potential upside from here."
Ms Norman said FAR was frustrated by the tight hole and ASX restrictions which constrained information release and, along with the oil price, had resulted in a "fraudulently low" share price that languished at around half it's pre-FAN1 level, "never mind that SNE went on to become the World's number one find."
"We desperately needed to signal to the market the lunacy that was seeing mum and dad shareholders selling in panic at the very time FAR is on the cusp of becoming a very serious company.
"This is why we needed to resort to the spurious subterfuge of a concocted one-on-one interview with me, just to get some emphasis behind already released data. There was nothing much new in this interview - in fact we didn't even bother releasing to the ASX."
Ms Norman pointed to clues within the interview that might still be missed by those who did not read it carefully.
> "High quality" partners COP and CNE were so convinced of FAR's pre-drill analysis that they stumped up 9/10ths of the capital cost of FAN and SNE.
> The prospect sizes mapped are large and require a large volume of oil to fill them. If our migration models are correct - and oil at SNE is a good indicator they are - "there could be enough oil being generated to fill all our prospects."
> We already have two stand-alone developments. Is anyone listening? We have two stand-alone developments and have not yet scratched the surface of the province.
> We are itching to get stuck into Buried Hills but need to be methodical about our progress. This whole thing will take three years.
> Speaking of which, results for both FAN and SNE will be released first quarter 2015. We are not stating on the same day, but readers might well infer this to be the case. And we will not rush this announcement just to satisfy the impatience of flighty punters - sorry, investors - who are looking for instant gratification.
> The oil at SNE is so easily recoverable that costs will be minimal, increasing the commerciality of this discovery. The Government of Senegal has thrown the kitchen sink at us to ensure this can come on line ASAP.
> FAN-1 is so big even we are not sure of what we have. Crikey, we haven't even struck the oil/water contact. Oh, and you can forget about this potential being revealed in our next announcement because we need at least one appraisal well to evaluate it.
> SNE-1 is no slouch either. Un-risked it is twice as big as we thought it might be, and risked ten times bigger.
> FAR is now settling down to do the hard yards required to realise the full potential of the three separate oil plays we know exist. All those Hot Copper jockeys sweating over tenth-of-a-cent increments in the share price might as well take 2015 off because for us the whole year will be about appraisal and planning.
> Cash-wise we are ok for the foreseeable future but we know we will need much more if we are to stay in the game and deliver full value to shareholders.
> Our work to date has derisked several geological prospects and leads which in time will - not may, will - be unlocked.
Ms Norman concluded: "Fair dinkum, what do we have to do or say to convince sceptics of the enormity of FAR's achievements and prospects? The oil price is transient; the oil is permanent. It is present in vast volumes and it is recoverable in large enough quantities to make us all wealthy.
"So what do we say? Oh yes, here's an idea: how about I just keep mentioning Jubilee and throw comparisons into our presentations so even Blind Freddy can understand the significance of the opportunity!"
OOO
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