Interesting arguments in that post Kfann. Last week Cairn...

Interesting arguments in that post Kfann.

Last week Cairn mentioned that the current operations are under budget & are approx ahead of schedule by 1 month. Quote Simon from the recent conf call on plans for the 4th well...

the joint venture’s right in the middle of deciding that and as you know the way we designed the contract it was a three firm and then three individual effective options on drilling. So we’ll see where we get to as the joint venture, that’s clearly a possibility. Whatever happens there will be further activity in Senegal, it’s just a question of timing and matching to the enormous amount of data that Richard has alluded to.

--------------

Also from a budget perspective, Cairn's net spending was US$166.8mil net in 2014 & US$114mil in 2015.

They now have ~US100mil to spend in 2016 in Senegal. These are net costs.

The JV has received a 3 year extension so they may opt to drill a few more wells to validate their model or drill other 'tie-back' prospects around SNE in that timeframe.

Also Cairn have shown at their Catcher oilfield in the North Sea, that they can sell a small portion for a 'carry' option. Out of 35% equity, they sold 10% to Dyas for US182mil & retained 25%.

So it's upto ConocoPhillips to show their cards at some point & take up the Operatorship in Senegal. Op'ship in Angola didn't work out for them, atleast Senegal seems to b on the right track for COP.

Depending on what the JV decides FAR may(?) have to find funds one way or the other. Looking at their cash, end of Dec'15 they had A$60.67 mil cash. Q1'16 outgoings are apprx A$26.9 mil, which leaves A$33.77 mil cash on hand by end of March Qtr. So if the 4th well is a straight-fwd drill, core, log and P&A in 30 days at SNE, then mayb they could just manage (might b a little tight for the budget). Need to see FAR's March balance sheet for Q2'16 outgoings.