FAR management email reply

Had another email correspondence with FAR and thought this should be shared.  Good to get their perspective on the discoveries, shareprice and activities going forward.  Here's an extract:

Dear (Hardmano)

Many thanks for your emails. The market is indeed very disappointing but I'm afraid that is one part of my business that I cannot control. It is clear from daily trading summaries that the majority of trades over the last two days have been through CommSec and Etrade implying that the share price movements have been driven by day traders.

We have a fantastic asset in Senegal that will change our company over the coming months and the share price may wander but we have 15% of a what looks to be emerging as a world class petroleum province with just short of about 700mmbbls of oil discovered (and recoverable on a P50 basis) in the first two wells ever drilled! By anyone's measure this is an amazing feat and the share price will sort itself out in time.

Please rest assured that we at FAR are not going to make any rash decisions about the future of our company. We are very well funded thanks to our capital raising so you can relax about the share price unless you are in for short trading and then it's anyone's guess. We were extremely fortunate to raise out capital when we did as the markets have been increasingly souring since then for oil and gas companies.

We have a lot of work to do in the meantime integrating the well data with our seismic and geological models, the result of which will be a finalisation of the contingent resource estimates for both discoveries in the new year. We pride ourselves on our excellent technical work (it's what secured the partners in the first place) so now need to get on with what we do best. "

Answers a few questions. Summary:  Traders not instos or SI's exiting.  They have 15% of a world class petroleum province.  It's an amazing asset that will change the company over coming months!  They won't be making any rash [i.e. quick] decisions  about the future of the company and they are well funded [so no near-term ER].  The share price will do what it does but the oil as an asset will still be there!  

And remember they are now talking P50 RECOVERABLE (i.e. ASX standard reporting not CNE's STOOIP numbers) .. so essentially what can now be claimed as 2C (Contingent Resource).  That means oil in place at P50 is more than 2,000mbbls given typical 30-40% recovery.  From memory P50 STOOIP for FAN was 950mbbls and SNE 330mbbls so that is likley to grow substantially (unless they consider recoveries will be higher than 40% ... in any case there's more oil).

Cheers

H