Bell Potter boosts its valuation

Hi All

Thanks to a good mate, I am now in possession of upgraded research from Bell Potter.

In short, BP has increased its valuation to 0.28 cents, an eight per cent increase from 26.0.

Here is the whole research folder
https://www.dropbox.com/sh/das9ex2wk07a3uf/AABMJ5n3zuCqvnNYhyhAG62ha?dl=0
Here is the new valuation
https://www.dropbox.com/s/btbwwymi9tid5il/FAR Bell Potter Valuation 20 October 2015 .pdf?dl=0

I am just heading out so have just skim-read, but think it is very impressive when you consider...

It appears that they have taken a current valuation of just SNE and FAN-1 in Senegal (i.e now of 20 cents risked NPV) ,with no upside or success against any of the upcoming programme, just the appreciation of these assets toward FID at around 11%.

From the document - "We have changed our valuation methodology to our usual 12-month forward valuation that is based on risked NPV-based valuations for the SNE and FAN fields".
i.e this valuation is only on SNE and FAN and excludes the leads and is risked. Therein some upside.

In assuming FAR will raise $50m to complete the drill program BP has worked on 3.9 billion shares and a SP of 9.4 cents. I really like this bit - "There could be favourable outcomes from the upcoming appraisal and exploration program in offshore Senegal that may lead to a share price rerating by the time the capital is actually sought."

Perhaps the most extraordinary statement concerns the prospective flow rates as SNE moves into production. BP notes "we understand initial production will exceed 100,000 bpd". Interesting given the whole appraisal program is designed to prove commerciality. BP seems to assume that's a done deal ... plus some!

I'm off. Others with more time please dissect report more fulsomely. Hardmano, sounds like a good job for you!

OOO