RIU Good Oil Conference - Vide, page-19

As promised, this response just in from Cath.

Nothing we don't already for obvious reasons of confidentiality, but I did rather like the sound of:

"...it’s only sensible that the Board of FAR seriously consider our right to pre-empt the proposed transaction."

and...

"...until we have the information from COP to allow us to evaluate the pre-emptive right, we cannot finalise plans..."

Finalise plans, hey? Intriguing...

One could be forgiven for thinking that we are only a few undisclosed documents away from pushing the PE button... cough 'em up, COP!

gh.

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Thanks for your email and I am glad you could make it to the Good Oil conference.

There is not much more to add about the pre-empt situation. We have been queried about why we would want to preserve our pre-emptive rights to the COP/Woodside proposed transaction and it’s all about buying cheap barrels in SNE (let alone all of the upside potential in the permits – which is what I did not expand on too much in my talk due to lack of time).

Our operator has released that the NPV/bbl in SNE at FID will beUS$12.50/bbl (based on Cairn’s 2C of 473mmbbls and a US$70/bbl oil price) and the look-through valuation of the proposed transaction is US$2.20/bbl (at the time based on a 2C of 560mmbbls). We have now released a 2C resource volume of 641mmbbls and are also confident that the OPEX and CAPEX for a development at SNE in the next 3-5 years can be reduced. Given these metrics, it’s only sensible that the Board of FAR seriously consider our right to pre-empt the proposed transaction.

Saying this, until we have the information from COP to allow us to evaluate the pre-emptive right, we cannot finalise plans and we are looking to resolve this situation as soon as possible and in an amicable manner.

Kind regards,

Cath

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