Solidarity, page-45

There's an old saying that the simplest explanation has a higher probability of being closer to the truth in most instances.

If we look at the facts we have;

a. 14/7 - WPL/COP deal announced stating conditional on any preemptive rights. FAR caught unaware.
b. 23/8 - FAR announce new RISC & a dispute with COP stating that in their view the preemption has not started because the financials of Senegal BV were not provided with the documentation provided. Most preemptive clauses state that the seller's obligation in any instance where a price for the preemptive asset is not straight forward then the seller can simplify the sale price by quoting the sale price on a price per bo basis to the partners for preemption.

High probability possibilities could be;

1. COP provided the sale price and have also offered FAR preemptive rights as FAR are not disputing this.
2. COP/WPL deal strategically announced to ensure preemptive period expires prior to FAR's RISC and declaration of commerciality.
3. Good chance FAR thought they had more time and were dependant on finalising finance for future preemption on receipt of the new RISC report. (Market aware of FAR seeking finance options since March 2016)
4. FAR legal advice determines that COP have not provided financials for Senegal BV and thus provides a potential loophole to dispute the preemptive start date. FAR choose to sit on this information until they are in receipt of the RISC report .
5. During the initial 30 days FAR pursue funding options which may be dependant on favourable RISC report and statement of commerciality.
6. Should COP agree to a re- start preemption FAR is in the box seat to preempt.

Probabilities and Conspiracy Theories could be;

a. If everything is above board then no logical reason for COP not to just agree to a restart of the preemptive window. If they had have agreed on 23 August then preemptive period would now have expired and the JV would be business as usual.
b. COP gets paid the US$430M regardless of who buys so why the reluctance to agree to restart preemption?
c. If we agree that there is no logic to points a & b above then the problem is the devil in the details which COP/WPL are declaring as being commercial in confidence.