Ann: Quarterly Activities and Cashflow, page-98

With reference to the change from lease to purchase of the FPSO, I emailed FAR about this in early January 2020:

In light of the planned (highly dilutionary) cap raise and (relatively expensive) loan finance being raised I’m puzzled about why the decision was taken, seemingly at the 11th hour, to move from leasing to outright purchase of the FPSO and I would be grateful if you could give me some understanding of what happened?

FAR's response was essentially (my words - its not verbatim):

The FPSO company would not accept guarantees for the lease from FAR, Cairn or the Senegalese Government and WPL was unwilling to guarantee the whole JV.Therefore a purchase was necessary.

Perhaps there is a silver lining here? With POO and the state of the industry generally, maybe leasing will be back on the table?