Hi OOO et al., Its very much in COP's interest to drag this out...

Hi OOO et al.,

Its very much in COP's interest to drag this out for as long as possible.

Simple reason is that all PSA's (Purchase/Sale Agreements) as in the case between COP and WPL come with solid warranties, guaranties, indemnities and penalties.

At a minimum COP would have warranted to WPL that it has title, guaranteed that it could deliver said interest and title and indemnified WPL against a pre-approved list of losses/expenses related to and following the transaction until such a time...normally upon gov't signed and received approval of the title transfer.

Short answer is that COP will be on the hook for not only all WPL's time and expenses but also a suit of penalties (break fees, 25%-100% of monies spent etc) should COP be unable to obtain Govt approval and completion of asset and title transfer.

So...what does that 'hook' possibly look like?

In the 7 quarter since the transaction was announced nearly 2 years ago, FAR's 5B statements say they have spent and capitalised some A$83.925 million on exploration; namely five wells in Senegal. I'm going to be a bit conservative and round down to A$75m as FAR's 'pure' spend on the JV.

This then infers that WPL's share of JV expenses since the transaction would be A$175m. On top of this, I'd add a break fee of US$10m and a minimum penalty of 25% of spend.

So my guess (yes... that's all it is) is that COP is potentially on the hook for a minimum of A$232m or US$174m.

COP don't have to acknowledge this potential liability at this time as it will only be an issue in the event of a) losing the arbitration case and b) unsuccessfully negotiating an outcome with FAR/WPL. They, of course, have sufficient legal advice to support their claim that FAR's case is without merit and hence do not have to consider this as a contingent liability.

But lets be clear: FAR and WPL do not have unlimited time to resolve this issue. The Senegalese Govt would have made this clear and at a minimum verbalised a time frame beyond which the Govt would be reserving (or threatening) their rights...especially over the Operators Licence.

COP may not know the specific time frame 'allowed' for this case but they (I believe) know one exists and will play it as long as they can.

They have 174 million reasons (and counting) to do so.

But seriously punters (and investors)....this issue is a value and time distraction....

The main game now; the biggest value uplift by a country mile will be....

SAMO! .....

(supported by something new...?...)

Disrobe the wigs and and burn the Philippino law degrees....stay focused on where FAR add value....exploration.

Cheers

Yeah....thats enough reason to stall