Updating slowly. added risks and Boaz overview. I'll have the rest of the projects added next week
Business Case and Updated Fundamentals
I thought it might be worthwhile to do an updated post amalgamating and condensing the business case, strategy and general overview of the company. There may be some personal bias reflected in my writing as obviously I have a vested interest and support the company’s approach. I welcome any positive feedback, criticism and information to add from your own personal research.
Pros/Benefits/Advantages/History
-19 year working history, cash flow positive throughout that time
-No history of debt or capital raisings or equity sell down outside of the IPO
-Substantial transaction record with 34 divestments
-Prior commercial deal value estimated at between AU$700M and AU$1.1Billion
-Partnered and transacted with some of the world’s largest energy producers including; Shell, Woodside, Santos, JX Nippon, Mitsubishi Corp (MIMI), Hess Corp, Apache, Sasol, Murphy Oil Corporation, PTTEP, Perenco, SapuraOMV, Schlumberger, Harbour Energy, Dana, and Equinor
-Numerous multi-party ventures and multi-drill farmins transacted on Finder licenses
-Demonstrated technical and exploration edge with 3 oil finds from 7 drills
-Discounted access to massive amount of exploration and technical data through sibling company Searcher Seismic.
-Original license holder and partner with Carnarvon Energy for the Dorado project. Finder’s technical work and prospect selection led to the drilling of the Phoenix-1 South discovery
-Strong cash management and proven discipline with an approximate average net drawdown of $600k per quarter
-$400k - $500k in receipts per quarter from JV partners
-Two year cash runway at current rate of expenditure
-Company founders own majority of stock, out of escrow, and are holding
-Tradable free float estimated at only 50M shares
-Stable management in place for a decade
-Share holder alignment through price target performance rights
-Average time to farm-out transaction is due on multiple projects
Risks/Uncertainties
-Business Strategy failure
-Permit time overrun or revocation
-Significant personnel importance
-Exploration failure, non-economical finds and other exploration risks
-Political and regulator risks (incl climate change related road blocks)
-Partnership and JV breakdown
-Major SH risk (LR have 52% equity i.e. control)
-Commodity pricing
-Security/Data risk
-Economic downturns i.e. commodity demand
-Black swan events (geopolitical strife or anomalies like covid)
Project/Asset Overview/
P2610 – FDR Equinor JV
Known as the Boaz prospect, the play is in proximity to Eirin, Gina Krog and Sleipner operated by Equinor. Most of the play sits on the UK side of the median line but (potential) production would likely go west through expanding infrastructure on the Norwegian side. The license was granted to the JV group in December 2023 with FDR as operator. The license is an ‘innovate’ phase A and was granted as a priority area for the UK government.
Additional information and history in the following links
https://wsrw.org/files/dated/2018-07-08/geo_expro_geoscience_magazine_v15i3.pdfpage 16
https://www.ges-gb.org.uk/news/pitch-your-prospect-boaz-prospect-block-168c-azinor-catalyst/
https://www.marketindex.com.au/asx/fdr/announcements/progress-report-boaz-prospect-update-6A1186832
Below is my own project valuation breakdown, important points are the potential project NPV net to Finder upon a successful drill. The expected monetary value uses probabilities (COS and COF) to determine the average of outcomes should Finder and Equinor drill the prospect at certain equity levels and cost points. The Value as Risk is basically a calculation that gives the likelihood of losing or gaining money in dryhole of success scenarios, for example: FDR could stump up 50% of the drill cost with the following outcomes – 78% chance of losing $15m and 22% chance of gaining $460m project value. If we instead farm-out the drill cost in exchange for equity, we get 78% chance of losing $0 and 22% chance of gaining $75m in project value.
Miscellaneous Details and History
(20min delay)