"I don't understand why all the rampers are being negative about the latest news from Cairn."
It's very simple really and is a reoccurring theme on all forums I visit , expectations exceeding the facts put in front of them combined with a lack of understanding of what's involved.
Once you get into a mentality of expecting more than can reasonably be delivered at this stage of a project then disappointment will be a constant companion, despite the fact that with FAR , a huge amount of positive progress is being made in what is always going to be a slow process.
A problem for many here is they have punted on the expectation of a quick TO or sell down, which is a high risk approach at the best of times , TO's in particular are not common and sell downs will only happen when the asset you are selling has some real value and thats further down the track.
Another issue for shorter term players is Shareprice and true value don't always go hand in hand, one often leads the other, it's why contrarian or longterm holders often do very well , the contrarian is waiting for these opportunities and the longterm existing holder doesn't have to sell and can wait it out...but every approach carries some risk..
Lots of conflicting issues for some holders that does their heads in it seems , yet if you read what's put out by the Company it tells you quite clearly that FID is over a year away and production should they get there, is approx 3-4 years away and it's very obvious there will be a lot of waiting in between and no income...Management in all Companies have a longterm approach to grow wealth and it's a no Brainer that in FAR's case they will have getting SNE to production as a minimum target, you don't let a project of this quality get away from you they are very hard to find, it simply defies common sense...that doesn't guarantee it will happen but it is where they will be heading so needs to be factored into decision making....
Events that are important for FAR coming up are booking reserves, that brings in reserve base lending if required , the results of PE and other farmouts and FID which is when development begin and financing it will be known..how they effect the Shareprice is a lottery but most will be adding value that will be recognised at some point in time and all will have a lot of waiting in between with considerable influence from the price of oil.
It is very much decision time on one's desire to tough it out, or add more, or move on ...which is a decision made every day by investors over thousands of Companies and only hindsight will establish the final outcome...FAR and the JV are ticking the boxes and getting on with the job of developing SNE and you can't ask for a lot more..
Cheers Whisky
(20min delay)