This just came up in my memories on Facebook ! How it went from...

This just came up in my memories on Facebook !
How it went from this to where we are now is unbelievable

Ten Bagger, Friday 10th October 2014


FAR out: rich oil find makes big profits for small punters


Junior oil explorer FAR Ltd (ASX: FAR) made the small punters’ dreams come true this week when it unveiled a major oil discovery off the West African coast.


FAR shares were just 3c when the company started drilling the FAN-1 well off the coast of Senegal in July. The stock rose to 10c last week in anticipation of the drilling results and hit a high of 16c on this week’s news of the find.


The well hit 29m of net oil bearing reservoir out of a gross oil bearing interval of more than 500m and, importantly, that no oil/water contacts were encountered.


The announcement prompted analysts around the world to set price targets of up to 21c for FAR, still well above the stock’s price this morning of xxc.


Bell Potter Managing Director of Institutional Equities, Angus Aitken, was enthusiastic about the discovery. “FAR announced they had made a major oil discovery off Senegal. Its black oil – minimal water and clearly this has the potential to be a 750 million to 1 billion barrel-plus structure that could lead to a 300m barrel contingent resource and hence at its current market cap of $270m, FAR`s 15 per cent interest is going to be worth an awful lot of money over time.


“This is not a one trick pony, they are putting down another well 20km from this well that is drilling as we speak and should see newsflow in November and that could add 300m barrels to the 300m contingent resource I talk about above. Fifteen per cent of a 600m barrel contingent resource with 15 per cent net to FAR is worth a lot more than the current stock price even if you put in $10 bucks per barrel.”


RCF Ambrian analyst Stuart Amor wrote: “We reiterate our speculative buy rating. We now estimate the stock’s fair value to be A21.1c, up from our previous A13.5c estimate.


“This oil discovery is fantastic (not a word we’ve been able to use to describe a well result in the last two years!) for FAR, albeit that the discovery is smaller than Cairn’s pre-drill estimate (817MMbbl).”


SBG Securities, a division of the Standard Bank Group, noted in a special report: “We have adjusted our valuation in light of the recent drilling results. Our risked equity value is up to A17c from A7c.


“Our estimate of the corresponding unrisked upside potential is A59c. At this stage, the stock has little core value support until a more robust independent assessment of the FAN-1 discovery is published. We maintain our buy rating with a revised target price of A15c up from A5c previously.”