Far spreadsheet late NOV post issue update, page-47

DB ................. read that article and actually discarded it as I was more looking at how to value a company in a TO situation and that is what I found in the EY reports.

The article is mainly referring to how an investor should calculate the stock value of an oil company and quite honestly there is only one way and that is by somehow placing a value on it's reserves; the last statement is, I believe, the most telling:

'So what's the conclusion. Well, value per bbl is a lousy metric, almost hopeless for comparing deals and valuing companies, but still better than anything else I can think of.'

The situation in a TO valuation is not to dissimilar to what he discusses however one major difference is the TO company will calculate the value of the targets reserves then place a premium on that value and this is what I was trying to get a handle on, it appears from the EY (2013 world & 2014 US) reports the value for proven or totally risked reserves would be somewhere between $US12 to $US22 pboo, almost a x2 variance I know but this is because the value of reserve replacement varies considerably from company to company and of course the POO is constantly changing (down) but it does provide a guide to the value of what we could expect in a TO.

All we need now is for the JV to prove up what they have and believe that, if the 3 additional wells do proceed (and I firmly believe they will) FAR's SH's will have a fair idea of what they have, 3 & 4Q 2016 is going to be very interesting IMO.

HKP