Just my slant on things but I don't think we need to analyse FAR like a bank share at this point time. Yes FAR has made a great discovery and we will need to fund SNE into the future. There is a question mark hanging over how far into the future as a TO at anytime is a real possibility.
Now this is where I feel it starts to differ from a bank share. While we have a locked in real value in SNE with a potential PE windfall (lightening bolt? - sorry could resist) we also VERY FORTUNATELY have block A2.
The SNE North well has shown us that oil is still migrating north of SNE on trend along the shelf line. With great sands to the south and A2 bordering SNE sitting over the same shelf line it would be extraordinary IMO that these sands have not been filled from the same source kitchen. So unlike a lot of other junior companies who make a once in a lifetime discovery which can be manipulated out of their hands due to cost after discovery, FAR still have a couple of aces up their sleeves. I'm sure the FAR team are working flat out to secure a farmout deal on A2 and will drill it ASAP. Success at A2 with the possibility of another SNE size discovery will add immense value to the SP and increase the FAR TO appeal. Given A2's close proximity to SNE I future production would tie back into SNE infrastructure, greatly reducing cost to production.
So given FAR's current status with a great discovery, PE outcome and A2 farmout/drill I'm not concerned about costs going forward and think holders will be in for another year of exciting and company changing news. Did I forget about Guinea Bissau - just another 500 barrel target to drill. Where will the money come from if /when we need more. Well there's Tim and a little company call CNOOC - not a bad strategic partner to have on board.
Ref: CNOOC 2016 Financial statement
http://www.cnoocltd.com/jcms/jcms_files/jcms1/web5/site/attach/0/1704250615141037823.pdf
"As at 31 December 2016, the Group owned net proved reserves of approximately 3.88 billion BOE, and its average daily net production was 1,302,922 BOE (unless otherwise stated, all amounts of reserve and production in this report include our interests in equity method investees). The Group had total assets of approximately RMB637.7 billion."
WPL aren't that big and scary after all.
Cheers
Plugged
Just my two bob's worth
(20min delay)