Djiffere JV Partner?, page-25

My thoughts are that FAR should farm out 35% for a 50% or more free carry meaning they retain 40% and operatorship and if the first well comes in they then have the option of selling SNE after DOC to fund DJ. It would be a hard ask to fund two separate developments with no cash flow. You would have to expect that FAR's equity in SNE may be worth US$900M (US$6bo x 150mbo 2C) in 12 months if everything goes to plan. Retaining 40% of DJ going into the first drill gives FAR options. Farming down to 25% or so makes them a junior in two potential fields and the funding requirements that go with both. We will just have to wait on FAR's decision on DJ. If the farm down keeps their stake at 40% or higher then the above option may be in play.