A few objective observations RR ;
1. Wild cat driller..... Ahem,
WAS a Wild Cat Driller. 2/2 wells came in. I'm not expecting the Appraisal wells
to be classified as "Wildcats". They know exactly where they are going to be drilling in this system from here
on in. Nothing is guaranteed, but I would consider a 50% strike rate for adding additional oil in the appraisals as a
good outcome anyway.
2. Needing up to $1B to get to production.
I think we will be done with the Senegal leases prior to committing $1B. Maybe 6-8 appraisal wells to achieve
good value for the asset. Our share would be @8 wells about $150m {assuming each well costs $125m}. We
have $40m of that already so another $110m required {providing we can progress to this stage}. If we can
raise @approx 10c then another 1.1B shares on issue to raise that $110m, or a dilution of 33% of existing
shares on issue. Once again, we wouldn't be even spending that amount of money if we hadn't succeeded
with the 1st one or 2 appraisal wells. So for a 33% dilution we could possibly increase the SP to 50 or 60c
or a 400% increase from the SP today. This is assuming the equivalent amount of oil is found in the
appraisal wells and POO isn't below $50 or $60bbl. Anyway, FAR is only committing $40m at this stage, if we
do get to spend $150m, then previous appraisals could have only been successful and the resource has been
upgraded along the way.
Even if FAR were to commit to production then our $1B share would be the equivalent of a $6B+ total to
develop the field. That is roughly what Jubilee cost to put into production. You are not going to spend
$6B+ to develop a low producer. You can expect fields to pump out 75K-125 000bopd based on that
investment. So, you fail to reflect the upside should FAR make it to production. I'll leave you to work out
13.7% of 75 000bopd regardless of the oil price.
3. Production would be in 2022. Jubilee was developed within 4 years of first discovery and producing
oil. That, if replicated, would equate to late 2018 for FAR.
4. Insane MC of $300m. Current MC = $288m less $41m cash and $15m for Kenya/GB/WA = $232m.
Estimated 2C resource of 86mmboo net to FAR or $2.70 per barrel in ground value. Fairly priced I would
say, all other things equal. No conspiracies here, it is what it is. Maybe you think $1.35 per barrel is fair
value at this stage? It might get close if the POO gets below $50 before a 2C can be booked, who knows?
Current price or MC is about right.
5. Ok, we'll consolidate at 10/1 tomorrow. SP =93c with 310m shares on offer. Happy?
At least you managed to post a new list RR, got sick of the old repeated one previously. My previous
post
14332058 answered that I thought, yet you still post it again & again with no revisions.
Adios.
GLTAH
(20min delay)