Ann: Quarterly Cashflow Report, page-76

Well since I just spent 30 mins reading this I may as well add to the conversation.

Having skimmed the report, been to the presentation in June and read this thread, similarly to Whiskey49,  I continue to be astounded at the determination to put a negative slant on what could not be a better situation for an oil exploration co. It's almost like it would have been better to drill to dusters so it would all be over.

As shareholders of course we would like to be sitting on a paper profit at all times. Some sort of security that we can exit if we need the money. But due to factors beyond our control that is not the case.

As I have said several times this report yet again reinforces a few things.

1. They repeatedly refer to this as a Joint Venture. ie. FAR remains a key player.
2. There is enough oil that the "JV partners" expect it to be a commercial quantity on information to date. "FAR believes achieving this threshold volume is a relatively low risk proposition, because SNE is estimated to contain a gross contingent recoverable resource* of 1C (P90): 150 mmbbls and 2C (P50): 330 mmbbls."
3. As if that is not enough the statements committed to IN WRITING on page 2 "FAR believes there is additional net pay and resource potential not included in the preliminary assessment of contingent resource estimates for the SNE field. This includes thin bed reservoir sands that, recent detailed post well analysis has indicated encouraging reservoir characteristics".
4. Page 6 "FAR is aiming to prove and surpass the minimum economic threshold of 200 mmbbls with the first two appraisal wells and we have significant existing funding for these two wells" suggests to me that the combination of having extreme confidence of proving commerciality with the first two wells and the existing funding to pay for those two wells means there will be NO CAP RAISE before the first two wells. If they prove a commercial quantity exists then they would expect to be able to attract big buyers and a SP increase that would allow a cap raise at higher prices (or a TO event). My belief that this is a genuine JV is important here too.
5. Anyone who thinks that three months leading into a major drilling program with seismic studies in conjunction and salaries etc won't soak up $11million simply doesn't understand the industry. There is nothing I can say to help there.
6. The report could not be clearer in stating that the costs for overruns during exploration have been paid. Page 6 "These payments were finalised during the quarter". If any remembers previous communications these payments were pending.
7. The issue of CN selling some of her options is a NON ISSUE to me. I agree with kfann that a salary of 500K does not necessarily make one wealthy enough to borrow $1.2M for shares ESPECIALLY when:
   • She has just been issued 10M new options.
   • She only sold the number needed to retain the balance without having to find the cash.

So when it comes to FAR and Senegal, for me there are only 2 concerns:

Oil becomes redundant
Political landscape changes

The rhetoric is just so strong, positive and leading that it could possibly be mean serious charges agains the management if things didn't pan out as indicated.

They have told me they won't be releasing info that could compromise their commercial advantage and that's enough for me. “The recent run of unsuccessful exploration wells around Africa is a sobering reminder of the significance of the basin opening discoveries offshore Senegal and the company making opportunity we have ahead of us over the forthcoming appraisal program.” - yet our volumes are expected to prove to be an underestimate.