FAR - A long way to go

                                                              FAR – (a long way to go)

 

FAR has 5,461,532,458 shares on issue. Refer to FAR maps in website announcements especially investor presentations. The below are for your googling and as yet unrealised game changers.                         Written 13/10/2018.

I started as a small shareholder Hardman Resources (HDR) which made initial discoveries in these type deposits and basin in Mauritania. I own FAR shares and no other connection.  

The discoveries by FAR that followed with SNE/FAN re awakened major oil companies to the fact that the Mauritanian discoveries by Hardman were no solitary accident of faulting. The FAR area of RSSD refers to the Senegalese licence areas Rufisque, Sangomar Deep (FAN), Sangomar (SNE) and Djiffere Offshore. 

The upcoming drilling in The Gambia licences A2 and A5 will commence as soon as the rig Stena Drillmax makes headway from the Canary Islands and reported to spud in October. You can see Stena Drillmax’s location at any time by using         https://www.vesselfinder.com      When it’s no longer at the moorings then it will be on its way to The Gambia. At 6 knots they will probably take 6 to 7 days to arrive and 1 to 2 days to set up anchors. I think someone on HotCopper said 22nd which would mean they would have to leave The Canary Islands early next week(week starting 15/10/2018).

The Gambian licences have a chequered history. When they were issued no neighbouring country had discovered oil. No 3D seismic and an inability to JV many became licence holders, awaiting any first drilling to revalue their own assets. Time ran out for many licence speculators. FAR was the forerunner, determined and dedicated. Of the licences made available I believe one northshore and blocks A3 & A6 are still available. But A3 & A6 in The Gambia and Djiffere in Senegal are not high priority areas.

Many investors may not realise the considerable significance SAMO drill prospect represents over and above those already discovered.

FAR owns 40% SAMO at SNE it has 15% reducing to around 13.75% from memory. So that becomes close to a threefold potential increase. Combine this with target size of 463mmbls as opposed to 100mmbls for SNE one has a 15 times target. SAMO is probably closer to SNE than FAN and on the same trend (if not direct continuation of SNE). In development both would take tandem priority over FAN with an ability to angle drill and intersect FAN at depth from SNE infrastructure rather than run infrastructure down slope. A slope that may be prone to underwater slips.

Referring to FAR maps and descriptions one will see that licence areas A1 and A4 are direct extensions of SNE and FAN deposit trends in Senegal. Licence holder African Petroleum has been relieved of those licences and has taken three court injunctions out against The Gambia. African Petroleum directors have admitted they had not committed to drilling as required under licence conditions and no major would commit to JV without licence extension. Several majors (including Woodside) have applied for areas A1 & A4. Not least of which are new JV partners FAR and China Oil.

Any risk posed by African Petroleum and its major shareholder to The Gambian Government was mitigated when re-elections were reinforced by Senegal and its neighbour countries. You can research the major shareholder name connection yourselves. He was well liked by African governments at one time.

Another catalyst which has largely been ignored in SAMO drilling and which has FAR as benefactor is the other 20% of A2 and A5. FAR has 40% and Petronas 40%. A company called Erin Resources; original holder that first introduced FAR and retained 20% interest. Unfortunately, it has failed also to meet its contributing amounts to both the JV and in taxes to The Gambia Government (owed some $5 million in back taxes). Erin appears to be insolvent in USA and any relinquishment of its 20% holding in licences and SAMO drilling would defer to FAR. So FAR could initially have 60% of A2 & A5 (& SAMO).

Watch this space because if The Gambian government recently ratified the Petronas holding maybe their next step will be Erin followed by licence areas A1 & A4. I think some interesting times are ahead in The Gambia.

Geopolitical risk. Over over a year ago new elections removed the previous leader. Risk was extreme and recommendations were then that all foreigners leave the country. With the new democratically leader deposed and forced to flee to Senegal all seemed lost. But Senegal and Guinea supported the democratic elections and insisted that the new leader be reinstated. The current leader was restored without further trouble and the new Minister of Petroleum is eminently better qualified to responsibly allocate licences. Sadly, for her she has inherited a rather difficult portfolio from her predecessor but nothing she cannot handle. So geopolitical risk has already been tested and sanity prevailed. On FAR’s record and China Oil’s pedigree I am hopeful that as JV partners they will be viewed favourably in the allocation of licences A1 & A4.

In Guinea Bissau blocks 2/4A/5A have FAR with 20% and Svenska as operator and drilling by end 2020. In Kenya the operation currently suspended looks an interesting area.

So upcoming catalysts as companies like to say

1. Stena Drillmax moves from Canary Islands will commence share recovery

2. SAMO drilling

3. Erin 20% status decision

4. Licence Areas A1 & A4 a lucrative decision (The Gambia)

5. Speculation share reorganisation with interest bearing and/or free premium option capital raising.  

6. If SAMO successful or not there exist follow up equally sizeable targets closer to SNE trend. Spin off target prospects in Senegal and The Gambia.

7. Nothing is guaranteed as seen in Phoenix drilling for CVN. Target permeability, water, gas all could be problems. But this is a target that is screaming to be drilled. A positive outcome has multiplying factors and a negative outcome is not the end of the area. Good Luck my fellow investors.  

 

There was a period of layering taking place but ASIC seems to have squashed it. Shares sold to non investors in recent capital raising ended up being sold for short term profit bringing down share from 13 to 11cts. The only good thing about that is maybe next time shareholders will get a chance. Currently an entity is involved in algorithm trading and using ASX mid point buying ( a broker perk). So when you see shares sold at 11.2, 11.7,12.2 etc you know you cannot participate and are being cut out of the market buying unless you pay up. The drill hole you have waited for a long time is about to be drilled.