I don't think we should put the idea of a $1 share price to bed,...

I don't think we should put the idea of a $1 share price to bed, in fact I think it is a real possibility - given a bit of time!

I do agree if people are waiting for $1 in the next few months they will be disappointed. $1, (at current shares on offer) values FAR at around $4Billion. Whilst a lot of money as I have posted before it is actually not huge in the O&G space. Chevron are spending 15 times that on building a single gas plant (Gorgon), Impex 10 times on Ichthys, and Woodside would need to spend 2.5 times that amount if it built a second train at Pluto. For the right resource $4Billion would be paid out at the click of a finger.

As the numbers at Senegal build what we could be talking about is "What would it take to get us to $1"? The three obvious things that are lacking at the moment are 1) no confirmation of what SNE and FAN hold, 2) no specific resource (bbls) formally allocated/owned by FAR, 3) no production or income to FAR. Production is still some time away. I do ponder sometimes whether the JV should call a halt to appraisal and exploration after BEL1 and turn its full attention to development of SNE. By the end of BEL there should be sufficient information to give a firm commitment to commercial volumes, and allow volume resources to be allocated. A staged development could then commence - and as a result of bbls formally allocated to FAR, give management the chance to go and talk debt facility with the banks.

A development cost of $1Billion dollars would require $150m from FAR. Potential forward selling, support from larger partners and debt could be used to fund this. If the JV was committed first oil could be in a couple of years!

The spectre of continual capital raisings whilst we are chasing the dream is IMO a no small part holding the share price back. We need to get certainty, and with some income, we would then be able to return to exploration to our hearts' content.

The problem with this approach is you need partners that want you around and are prepared to help you get into the league...question is do we have those type of partners?


dodds