Buy FAR & get 70mmbbl 2C for US$2.45/bbl, page-12

Hi Hobbester

You can find the full rationale on methodology in the following link, which is the last release I have made.
The extracted oil price table I posted above is actually referenced to a 330mmbl SNE field and the full spreadsheet effectively does modify these values a bit by the use of efficiency factors which increase/decrease the values for higher/lower recoverable volumes.

http://hotcopper.com.au/threads/far...update.2676788/?post_id=16765278#.VrvMUeYpp0w

The reason I posted the oil price table separately above was in response to Nammuldi's post and thread title. This very question has been posed before when in early 2015 with Mandurah and I were discussing "what price is the market putting on FAR's 2C resources" and "is this value appropriate or does it represent a bargain?" and "is there any logic to it?". So at that time I set out to create a set of logic of my own as an experiment to see how the values I arrived at using that logic would turn out to correlate with the FAR market share price as time went on.

Nammuldi suggested a price of US$2.45/bl currently for 2C and that this could be even lower taking all the other Senegal resources into account. The tables do take all the other Senegal resources into account and suggest a current attributable value of nearer $1.20/bl for the same. Is that value too low, thus making the stock a bargain? I can't answer that question, it is just what the market says, but obviously a suitor would be expected to pay more, as the market, except in it's moments of exaggerated exuberance, always seems to discount true value...... after all, unless you are buying a stock for dividend yield, there has to be some sort of way to persuade you that you are getting good value and this is one way the market has of allowing you to feel that


pj