How much is Far worth, page-39

Vegepatch,

I was awaiting a post like this, it would seem my disclaimers didn't work and you have misread the maths as well...

I say in my disclaimers that Unrisked is very optimistic and unlikely. I state that success could place the value somewhere between risked and unrisked.

Can you run us through your maths as to how you get to calculate FAR's Senegal portion to be 10 x its current value?, I don't follow your logic.

"I may be missing something but if 40% of Senegal is worth $2.3 B (1.15 x 2 after success for Cairn) then surely 100% has to be more than double that and in fact $5.75 B (ie 2.3/0.4)? And then FAR's 15% share would be $860 M (5.75 x 0.15). Or almost exactly a 10 fold increase as KKW guesstimated."

Cairn is already worth 1.15B, the quote I referenced is Credit Suisse stating that it would double with success. You appear to then double the valuation of Cairn again. (the magic vegepatch accelerator).

I would rate success at 5-6 times the current price for Senegal risked.

The purpose of my post was to state that Credit Suisse's estimations on success are at the conservative end of the risk spectrum and to illustrate that in a very optimistic view, the upside is many times that.


Did you know that the chances of success of an Oil drill find are estimated based on the history of all finds success rates, I posted around this previously. It would be like saying the chances of a child dying prior to 5 years old is 30% (pre 1900's this was roughly accurate). With modern developments this is of course not the case. However Oil specs still reference the longer term average, this is despite the major break throughs in technology, seismic equipment and not withstanding the fact that a deep drill is now many many times the depth that was until even recently possible.

With your logic around COS, can you please educate me as to how Tullow has hit commercial finds 7 times in 7 drills in Kenya?

"Prior to the latest discoveries Tullow had already found oil the Ngamia-1, Twiga South-1, Etuko-1 and Ekales-1 and Agete-1 wells, meaning that it has now clocked up seven consecutive finds in northern Kenya."

Reference;
http://www.capitalfm.co.ke/business/2014/01/tullow-announces-more-kenya-oil-finds/

Referencing your winning Lotto many times comment, Please let me know how what Tullow has just done is statistically possible?