hartleys brokers report today spec buy 17c

( is this ok Mods? if not please remove thxs)

FAR LTD
Mbawa Discovery Adjacent to Two FAR Blocks - Buy
We are upgrading FAR Limited (“FAR”, “Company”) from a Speculative Buy to a Buy based on its large exposure to offshore Kenya, where the Mbawa gas discovery was recently made in Block L8. FAR has a 60% operated interest in Block L6, immediately adjacent and to the north of L8, and a 30% interest in Block L9, immediately adjacent and to the south of L8.
FAR recently acquired 3D seismic over its two largest prospects in Block L6, which lie adjacent to the source kitchen that generated the hydrocarbons in the Mbawa discovery. L6 has been independently estimated to have potential for 5.7 trillion cubic feet of gas (based on RISC report of prospective resources at 1.4 billion barrels of oil equivalent, 70% gas). The play types are not the same as Mbawa; however, the proof of a working petroleum system has significantly de-risked the plays that are evident on the permit. FAR’s large working interest provides substantial leverage, even if it were to farm-out, and we would imagine that this would not be difficult given the success next door.
Additionally, FAR has a 30% working interest in Block L9, which does have prospectivity in the same play type as the Mbawa discovery. The Mbawa secondary play will be penetrated by the current well within days. This play is also evident at L9. There has been little information provided about the volumetric potential of the permit and more seismic is required before this can be estimated.
We have assumed ~10 trillion cubic feet of gas potential across both blocks and post farm-out working interests of 30% and 15% for L6 and L9, respectively. Using a valuation metric of $0.50 per thousand cubic feet and probability of success of 30% results in risked valuation, net to FAR, of 15cps with upside potential of 49cps. Given the success at Mbawa, the Company may choose to retain more equity in the assets than we have assumed, which would result in increases to the valuation.
Gambia Drilling More Visible – Within Months
African Petroleum stated in its half yearly report, released on 7th September 2012, that “The Company is now planning to drill the Alhamdullilah prospect in late 2012 or early 2013, and may utilise one of the slots on the Eirik Raude drilling rig for this purpose.” Alhamdullilah is a 500 million barrel prospect, of which 25% extends in to FAR’s 90% owned Senegal acreage. The upside potential from this well alone, net to FAR, is 45cps.
Well Positioned for Huge Re-Rating, with Additional Catalysts
FAR has exposure to likely further drilling success offshore Kenya, where it has two blocks adjacent to a play opening well in the region. Additionally, activity adjacent to its Senegal acreage could result in a further re-rating by early next year. News related to farm-outs on both coasts of Africa is also probable.
We have upgraded our recommendation for FAR from a Speculative Buy to a Buy and have increased our price target from 13cps to 17cps.