Far spreadsheet 500mb table interim DEC 2015 update, page-22

PJ/Aqua---all in good fun trying to pin some values....PRE confirmation of results and PROVEN
oil as well as the POO and rotten sentiment at the moment.

A few observations ;

1. I tried out the exercise of "valuing" FAR's assets based entirely on the Cobalt example which
was exercised in August of this year with Brent @$45. That is the closest "real" example that
we have to go by, in this environment. See "Fair Value" thread.

2. Of course my valuations, based on the Cobalt model were in 2 stages of this CURRENT 3
well program. A static point in time, with the POO currently at $7 less per barrel than the
Cobalt example.

3. I "did the sums" based entirely on the price Cobalt actually received, notwithstanding
the economics of their project v ours which I cannot compare.

4. Eerily enough, my price of success case on all 3 wells, based on the above came out at
16.25cps. I did this independently of PJ's valuations,.I had not remembered any of his
projections as I had not put them to memory or gone over them for a considerable
period of time. His valuation of 16.3c coincides with my valuation based on Cobalts
price received. Or, in other words, his valuation reflects the reality of what Cobalt
actually received in this present market, FACT, not supposition.

5. Of course, comparitive economics of projects, reasons for selling and who will pay what
for any chosen project may and will differ.

Aqua, old mate ;

A. FAR management is stating that they believe they could achieve a valuation as though Oil was at $80 in a takeover, per the commentary from OOO. Which we both know makes a quantum shift to the pricing. From your own tables the difference between $40 oil and $80 valuations seems to be a 3.5X factor, although you are saying in a takeover at $40 only a 1.4X multiple?, a difference of >200%.

There is a fair bit that worries me about this statement. In general, what we wish and hope for
may not come true. It is their opinion obviously, it may prove to be right. On closer scrutiny
however, it means about as much to me as P10-P90 estimates PRE discovery. It is a throw away
line in the context of where we sit at THIS stage of proceedings and the backdrop of $38 Brent.
IF we achieve ultimate success with the entire current 3 well program {2P 165mmboo, 2C 505
mmboo SNE & 2C 168mmboo Bellatrix} then 16.5c is the price based on Cobalt's price
received, once again, notwithstanding project economics and who wants to buy and why we
would want to sell etc. My view is that in order to be talking valuations based on $80 oil in a
T/O scenario, we would need to be much more advanced into the 2nd stage of the 6 well
program with good results, & oil around the $50 mark minimum. Certainly not at this stage
and with Brent @$38. Couldn't see it in a pink fit, happy to be proved entirely wrong though,
should it come it to that.

Valuation of Remaining Prospects ;

You value the remaining prospects on the shelf should SNE/Bell prove successful @7cps
v My price received of 1.3cps. You rightfully have more upside than Cobalts price
for their remaining prospects {25c per barrel based on their remaining prospects}. I
assigned a value of 50c pboo on the remaining shelf prospects. However, I have no idea
where Cobalt's remaining prospects were located and if they would be de-risked to the same
extent as our prospects re close tie-ins etc to SNE. Project economics and relative de-risking
of said prospects will have a major bearing on the value attributed to them in any sale price
negotiated. In that respect, Yes, apples & oranges probably Cobalt v FAR, with FAR commanding
a much higher price for their prospects should that be the case.

Production in 3-4 years v 7 years ;

Don't fully understand the metrics used here, but yes, would obviously have a material
bearing on any reserves the closer they are to production.

Points D,E,F & J ;

Remain even more speculative than attempting to put fair value on any KNOWN
reserves and resources once they are confirmed, so will leave that well enough alone.
Of course, speculation & opinions at the time are neither right or wrong, until the passage
of time answers one way or the other.

Some good talking points at this stage of the cycle. We will all separately place what we
think is fair value for FAR post SNE2,3 and Bellatrix and the results that are made available
at the time. It is a good exercise, in so much as individually, at least, we can all arrive at what
each of us perceives as "fair value" at any stage in the cycle and make our decisions accordingly.
That cannot be a bad thing......and it will be a great problem to ponder.

GLTAH