Aqua Please Come Back - all reply to show support, page-12

"As is relevant today, the "un-risked" numbers have always caused me concern. However, I have never sought to denigrate Aqua for presenting them because, despite my concerns, they show what things may look like if everything went perfectly. That is they place an absolute, albeit theoretical, cap on the value of FAR. And is based on the number of shares issued today to calculate a value per share. The number of shares on issue must increase to fund future development. How many and when these new shares will be issued is unknown. Accordingly, in absence of a better number taking account of additional shares being issued, the number of shares on issue today have been used. And many posters will disagree with this approach. Fine. But please provide an alternative analysis so that readers can consider both sides of the argument. Calling someone or implying that they are an idiot or stupid is not productive or helpful - even if it makes you feel better"


Hi BSP

Thanks for your post. I appreciate your thoughts as a whole but have extracted the above for further comment. It is possible that I have not fully appreciated what Aqua has meant by the "Blue Sky" section in his tables in that this represents possible future value. I had rather taken it to mean "current" value because he has added the current value for SNE and FAN to all the other sections as if they were the same thing and totalled them down the bottom as if they were a current total (there is no forward indication for the global valuations either). If aqua had explained this to me maybe we could have worked towards a constructive solution instead of him abusing me then going of in a huff. In any event I remain concerned that aqua's table is potentially misleading and open to misinterpretation, especially by newcomers.

With specific respect to your points above re the misleading potential of unrisked values I again share your concern, also with the failure to allow for share dilution as a result of forward costs where I fall in the "many posters will disagree category".

You ask me to provide an alternative analysis and my previous spreadsheets posts certainly do that (search FAR spreadsheets if you are not already familiar with this).

These sheets only account for the upcoming first three wells and because of the problems of not knowing exactly what the forward program is to be and the timings and price that moneys are to be raised (which will also depend on future results) I have refrained from posting forward scenarios further ahead than that. However I have indicated in a more general way that continued moderate success in line with risking could, despite the estimates of dilution needed to pay for exploration and appraisal costs result in incremental increases more or less in line with what I indicated in the uptrend chart I have published previously and also recently in response to the post below:

http://hotcopper.com.au/threads/far...2613135/page-64?post_id=16160051#.ViTOXXnouUl

You will note that the upper trend line allows for 40 - 60c if all goes well. Higher if the oil price goes back up and vice versa.

pj