Broker Comments

Latest broker comments
2353 GMT - A key attraction of FAR's (FAR.AU) latest West African oil-exploration play is its flexibility to bring in a partner before drilling starts, says Morgan Stanley. FAR will pay US$5.2 million upfront and fund up to $8 million of ERIN Energy's (ERN) share of drilling costs in two exploration blocks off Gambia's coast. In exchange, FAR will own 80% of the blocks, which are immediately south of the SNE oil discovery--one of the biggest globally in recent years. "The high equity interest is a positive," the investment bank adds.

2305 GMT - Credit Suisse applauds FAR's (FAR.AU) purchase of 80% stakes in two exploration blocks south of the SNE oil discovery in west Africa. On Tuesday, FAR said it would pay US$5.2M upfront and fund up to US$8M of ERIN Energy's (ERN) share of drilling costs in the blocks offshore Gambia. "Despite being very early days, the acreage addition appears to be a savvy and logical acquisition for FAR giving them more exposure on trend to the existing SNE field to the south," the brokerage says. It thinks FAR will have plenty of financing options down the track, including potentially farming down to another party. ([email protected]; @dwinningWSJ)

2241 GMT - FAR (FAR.AU) is buoyed by fresh success with the drillbit, but Credit Suisse thinks it should resolve a dispute over Woodside Petroleum (WPL.AU) joining the venture appraising the SNE oil discovery offshore Senegal. FAR signaled interest in using pre-emptive rights to buy a bigger stake in SNE, after ConocoPhilips (COP) agreed to sell out to Woodside. However, FAR has since been in dispute with COP over getting the same terms and conditions as Woodside. CS says it's becoming a distraction. "We...hope the issue can be resolved swiftly, ideally ahead of any FEED decision, so the market can focus entirely on the progress the project continues to make," CS says. FAR last traded at 7.8 Australian cents. ([email protected]; @dwinningWSJ)