Ann: Proposed sale of ConocoPhillips interest in Senegal,WPL-FAR.AX, page-17

HT1
Always enjoy your posts. I remember them from the OZL days!! I am Far and WPL holder.

Re ...."I personally think that PE find O&G exploration & development difficult to justify due to the high CAPEX and high risk." There are definitely large energy funds within the major PE groups looking for a home. Try Blackstone and Warburg Pincus who have invested in Kosmos Energy that have a very large gas find just up the road from these Senegal assets. Think also large companies such as Total that have numerous onshore and offshore oil and distribution assets in west Africa. My point is this. When WPL set the price through a canny and very well priced purchase it has set a benchmark now for others to possibly join Far in Pre-emption of this deal. At the end of the day what Far has to lose is "burning some cash on some lawyers" whist if they are successful then WPL stands to lose the entire 35% equity. I personally hope as a share holder of both companies that WPL and Far sit down and discuss, what the Senegalese government has suggested, an amicable outcome. With my WPL hat on, although this may mean losing a bit re equity or cash or a free carry, it still keeps us in the game and any compensation to Far is more than offset by the already announced increase in resources to when WPL actually did the deal.

Regarding your comment about time frames and capex costs and risk for PE groups. A valid point, but keep in mind that this project in Senegal has already been significantly derisked by successful drilling, flow testing and detailed drill log interpretation based on the 3D seismic. This is presumably why WPL pounced when it did. Announcement of commerciality of this project is very close and further planned drilling is expected to increase field size and resource. An investment by PE groups now may be seen by them as suitable timing with an exit strategy within next 12 to 18 months if they are comfortable with seeing increased valuation to jump their internal hurdles. Of course any investment by these groups is tied in to securing a competent partner like Total. All of above is obviously speculation but hopefully will add to discussion on this thread.