FAR (ASX) Extremely Rough Value Calculation

Originally posted by PhillW: ↑

There is always a buyer and those that think otherwise are delusional. It always comes down to price!

WPL purchased COP's assets when oil was trading at similar prices and payed US $14M per percentage point when including additional costs. That values FAR at 15 x US $14M = US $210M. WPL has spent a considerable amount of money since the purchase so lets say US $100M or an additional US $3 per percentage point. So that makes US $17M per percentage point as fair value.

WPL are naive if they believe market forces and the fairies will deliver FAR's assets to them for zip. The CEO of WPL did not get to his current position by believing in fairies. To do nothing risks another entity obtaining FAR's 15% and depending on that entity also gives them potential access to CNE's 20%. I dare say if CNE coughed up 21% WPL would risk losing the operatorship so again WPL needs to eliminate risk.

FAR are desperate and the market knows this but no one turns their back on a good deal. What is a good deal? Good question! Noting that WPL's carrying value would be around US $17M per percentage point and that was a bargain back in 2016 then you would have to think anything 30% or higher discount to WPL's costs would be of interest to someone wanting access to oil. 30% discount to WPL's carrying value of Sangomar is US $10M per percentage point valuing FAR's holding at US $150M (AUD $210M). A 50% discount values FAR at US $127M (AUD $178M).

My first thought is the Chinese with their bullying tactics with regards to trade and stealing sovereign interests in the Sth China Sea, cyber crime and Covid-19 debacle are alienating themselves from a good proportion of the western and Nth Asia world. China's main problem is lack of resources and one of these is oil, hence their aggression in the Sth China Sea where an estimated 3.8T (trillion) boe are estimated. Finding, developing and pumping said oil will take many years. In the mean time China needs oil. FAR may be in the right place at the right time.

WPL can sit on its hands and wait for FAR to default but here's the catch! WPL would only be entitled to 6.17% of the FAR equity. CNE 7.05% and the remainder goes to Petrosen. I have already stated that WPL needs a minimum of 8% to ensure that they cannot be vetoed by the other partners when voting. Something I guarantee that they are aware of.

So using a 50% discount to WPL's carrying value and adding cash of AUD $100M would value FAR at 2.7c. If using a 30% discount then that increases FAR's value to 3.1c.

I don't think WPL can go out and buy FAR's 15% without triggering a PE event. My prediction! WPL will make a move on FAR and put it out of its misery. Expect a takeover bid starting in the mid to high 2c range especially if there are whispers of a cashed up entity doing due diligence.

Expand

What arrant nonsense....imo
Meridian are not the slightest bit interested in 3c, or 5c...imo... they want the asset... and will get it... for nix...... just watch....
They hold ALL the cards.... and could make the SP .0001c instantly...... if they chose to do so..... ask the well fleeced hippy... FARJOY!
DYOR

No.	Vol.	Price($)
1	24580	48.0¢

No.

Vol.

Price($)

24580

48.0¢

Price($)	Vol.	No.
49.0¢	16934	2

Price($)

Vol.

No.

49.0¢

16934

No.	Vol.	Price($)
1	24580	0.480
1	40000	0.475
2	78150	0.470
3	160000	0.465
1	30000	0.460

No.

Vol.

Price($)

24580

0.480

40000

0.475

78150

0.470

160000

0.465

30000

0.460

Price($)	Vol.	No.
0.500	20956	4
0.520	25000	1
0.530	10000	1
0.550	12285	2
0.590	5000	1

Price($)

Vol.

No.

0.500

20956

0.520

25000

0.530

10000

0.550

12285

0.590

5000

(20min delay)
Last 49.0¢		Change 0.005(1.03%)		Mkt cap ! $45.28M

Open	High	Low	Value	Volume
48.0¢	50.0¢	48.0¢	$13.87K	28.54K

Extremely Rough Value Calculation, page-4

Sun Silver gets that drill to thrill feeling from high grade hits at Maverick Spring

Polarx discovers thick sulphide mineralisation at Alaskan Cu project

Peregrine extends high-grade gold shoot, sniffs anomalism at WA's Tin Can

ASX200 dives as inflation clocks in at 4% – higher than 3.8% consensus

Ironbark eyes lithium and niobium opportunities with 7 new Brazilian projects

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News

Extremely Rough Value Calculation, page-4

Top Stories

Sun Silver gets that drill to thrill feeling from high grade hits at Maverick Spring

Polarx discovers thick sulphide mineralisation at Alaskan Cu project

Peregrine extends high-grade gold shoot, sniffs anomalism at WA's Tin Can

ASX200 dives as inflation clocks in at 4% – higher than 3.8% consensus

Ironbark eyes lithium and niobium opportunities with 7 new Brazilian projects

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News