3am musings, page-9

Vege...

Nervous times but risk is a coherent part of small cap oilers, but the rewards can be huge. That's why we bought FAR to begin with. We all have different comfort zones & level of risk, but as they say "If you're not standing on the edge, you're taking up too much room"

Way I see it is:

> Old 2D & 3D has identified large targets offshore Senegal

> Conventional drilling using 3D only gave a success rate of 1 in 4 or 25%

> CSEM has significantly de-risked this & after reading a lot of articles on this puts average success rates at better than 50% & some articles claim up to 90% if the CSEM data is good & interpreted correctly in conjunction with good 3D data (which we have). Shell are industry leaders in this and deep sea drilling.

> Hardman Story originated in adjacent Mauritania

> The same rock source has produced large finds North & South of Senegal blocks

> West Coast of Africa in the Senegal area has been on Professional Oil Experts radar for decades as being unexplored and having great potential for large finds

> West Coast of Africa was, before plate drift, attached to the prolific oil bearing area, "The Gulf of Mexico" & the coast of Brazil where large offshore plays have just been discovered.

> Rocksource has had a positive CSEM survey just to the North identifying targets over 1 bill

> Shell would have had a long look at the 3D data before commissioning their own CSEM survey

> CSEM survey is being used to identify multiple drill targets, not just one as is the case in a lot of land bases leases.

> CSEM only covered a portion of the 3 blocks leaving other areas for future evaluation by other companies if Shell opt out.

> Recent wells drilled in South Africa have had a better than 60% success rate & I would assume not all of these would have had CSEM surveys. Oil companies now have a better understanding of the geology.

> Contrary to other posts that have somehow managed to have this as a all or nothing shot for FAR, FAR have leases in Alberta Canada, Gulf of Mexico (offshore), Louisiana & Texas which are producing & some handy leases off North Western Australia. If it all turns to poo & Shell pull out, FAR will still have all of the above, be cashed up & will still be the operator with a 90% stake in Senegal, free to negotiate with others.

> This deal negotiated between FAR & HUNT initially & now SHELL highlights that Michael Evans, love him or hate him, has built up some pretty good contracts over the last 20 years in the oil game, so I'm sure other opportunities will come along and may be already in the pipeline.

IMO Senegal worst case risk factor on back of excellent 3D data without a CSEM is around 25%. Throw in a +ve CSEM & FAR is a better than even chance of having the Big One drop on all of us.

Hope this helps you as it has sure helped me making this list. At this stage I think we're all looking for a cookie & a warm glass of milk or better still a couple of rums - bottles that is. Cheers

Just my opinion only. Please DYOR