I totally agree with your no bid imminent comment. Last year I posted that there'll be 1000+ posts on this topic which I now believe will prove to be a gross underestimation before it actually could happen.
It would be pre-emptive suicide for anyone (maybe apart from COP) to launch a bid:
1) until clear 2P reserve analysis and calculations - possible maybe some 3-6 months after B#1, and the basis for DoC.
2) until a clear understanding of the likely development scenarios from the Development Operator which will only evolve out of the 9-18 month detailed project scoping and PFS processes after DoC, (obviously before FID)
3) until Petrosen/Senegal Govt have tested their extremely nascent fiscal and operating policies. I don't believe that any non-JV bidder would stand a chance to get a bid up without the implicit approval of the Senegalese Govt. This is a virgin system and no-one wants the boat rocked until it has been tested. Everyone wants this first project to get off the blocks with as little distraction or issues as possible. FAR keep highlighting their very strong in-country relationship and I believe that most bid proponents recognise this as a likely barrier at this juncture.
4) All oil coys, their treasuries and bankers are in lock-down mode. whilst the low OP and this lock down exists, no cash will ever be provided for a non-cash flow generating entity, let alone one that has a reasonable large cap spend ahead. Every M&A enthusiast can readily see that it is much more advantageous to keep the minnow FAR spending its shareholders cash de-risking this project.
On another note, I quite respect the games being played between CNE and FAR with respect to their different independent analysis of resources and CoS for various plays. CN is clearly messaging 2 key points: 1) They are not technical minnows awaiting pronouncements from larger JV operators. They have so far been right about how this field would likely evolve and they are letting both CNE/COP and Petrosen know that they know. 2) FAR are keeping regular, independent valuation tabs on this field and surrounding plays. With each material change in the projects knowledge, its important to have a independent valuation trail ready to assist (or combat) any third party or financier. And it tends to be typical for non-operator parties to have higher valuations than Operators. Human nature really.
But Hell, its been a rare privilege to watch how this project has grown and evolved; and there's still plenty more to come.
Cheers,
FAR Price at posting:
10.5¢ Sentiment: Buy Disclosure: Held
(20min delay)