I've read lots of threads referring to a decision coming from Europe & Royal Dutch Shell. My understanding is that FAR is dealing with Shell Oil based in the good ol’ USA. While Royal Dutch Shell is the parent company, I would have thought, given the size of Shell Oil, a small $65 mill decision to take up the option or not would come from Houston in the States.
Interested in hearing thoughts on this (clarification). IMO makes no difference to Senegal outcome, just may explain the Hunt, FAR, Shell relationship.
Coincidently Hunt Oils HQ (Dallas, Texas) is only a few hours away from Shells HQ (Houston, Texas). FAR have done business in this region for years & continue to do so with some recently acquired large leases still to be further explored)
Still don’t know how/why FAR was handed Senegal on a silver plate.
Breaking news is that CNOOC has just paid $1.5 Bn for a 20% stake in Angola Block 32. Marathon oil put this 20 % stake on the market last September (around the same time FAR received 3 Senegal block for nothing) for $2 Bn US & have just accepted $1.5 Bn for it.
Note: Other sites show the sale was reportedly $1.3 BN prior to closing & the source from above stated the sale closed at $1.5 Bn US)
Difference between FAR’s Senegal blocks & Block 32 is that Senegal has 1 bn + barrel potential while Block 32 has had successful exploration wells initially confirming over 1Bn barrels before being upgraded to approx 1.5 bn barrels.
Seems to be a world wide market value price trend appearing for leases with confirmed reserves of 1 to 1.5 Bn barrels
RECENT AFRICAN COMPARABLE SALES
Sale 1)
CNOOC Block 32 sale $1.5 bn US (20%) equates to $6.75 Bn US for 90%
Sale 2) (full calculations in one of my earlier posts)
AKPO field sale price paid by CNOOC ($2.3 Bn) for a 700 mill barrel play,
If Senegal realises 1Bn barrel potential compared to AKPO field price (700 mill barrels) paid by GNOOC Comparative value is:
Comparable AKPO sale price $2.3 Bn multiplied by 2 multiplied by 1.4258 = $6.5 Bn US
Here’s hoping for a positive CSEM & subsequent drill hitting 1 mill + barrels in Senegal as China is showing keen interest in this area.
I think this sale also shows that other companies will be keen to try & get their hands on FAR’s 20% stake if Shell take up the option which will drive up the SP.
OPTION WORDING (does not refer to Royal Dutch Shell)
25 Mar 2009 ... “First Australian Resources (FAR) has executed an Agreement with Shell Exploration Company B.V. (Shell) to conduct an exploration program in”
Shell Oil Company
Headquarters Houston, Texas, USA
Key people Marvin E. Odum, President Industry Oil, energy
Employees 24,008 (2008)
Parent Royal Dutch Shell
Website Official website
Shell operates in over 140 countries. In the United States, its Shell Oil Company subsidiary, headquartered in Houston, Texas, United States, is one of Shell's largest businesses
One Shell Plaza, Shell Oil Company's headquarters in Houston.
Shell Oil Company is the United States-based affiliate of Royal Dutch Shell, a multinational oil company ("oil major") of Anglo Dutch origins, which is amongst the largest oil companies in the world. Approximately 22,000 Shell employees are based in the U.S. The head office in the U.S. is in Houston, Texas. Shell Oil Company, including its consolidated companies and its share in equity companies, is one of America’s largest oil and natural gas producers, natural gas marketers, gasoline marketers and petrochemical manufacturers.
Shell Exploration & Production Company Shell Exploration & Production Company 200 N. Dairy Ashford St. Houston, TX 77079 United States TEL: 281-544-2121 last updated: 7/27/2009 11:24:26 PM While some may sell sea shells by the sea shore, Shell Exploration & Production Company (SEPCo) drills oil wells by the gulf shore. The company, a unit of Shell Oil, explores for and develops and produces oil and natural gas in the US. It searches primarily in the deepwater fields of the Gulf of Mexico, although it also has holdings in Alabama, Alaska, Colorado, Texas, and Wyoming. SEPCo is developing a system of heating rock underground that separates hydrocarbons in shale. The company employs Halliburton for nearly half of its integrated drilling services in the Gulf of Mexico. [Shell Exploration & Production Company; Shell Exploration; Shell Exploration & Production; Shell Exploration & Production Co.]
FAR Price at posting:
11.0¢ Sentiment: Buy Disclosure: Held
(20min delay)