is it just me or..., page-13

http://www.pex.com.au/samples/pm_sample2.pdf


We estimate that the downside case for FAR if no farmout is achieved is ~3cps
(based on cash equivalents, net of the convertible note, of ~A$15m or 2.3cps).
If FAR achieves a farmout this year, we believe a share price of 15cps is
achievable, with 30cps not out of the question as the drilling date approaches.
Our price target of 9cps is indicative of our view of the probability of achieving a
farmout, which we conservatively estimate as a 60% chance of occurring. We
consider this estimate conservative because FAR management has delivered in
the past under more stressful conditions in terms of time constraints and during
the low oil price environment of the global financial crisis.
The upside case, in the event of a discovery (possible drilling 2011, estimated
chance of success 5%), could see a share price in excess of 200cps. Guinea
Bissau Potential Underrated by Market FAR has recently acquired a 15%
interest in 3 blocks, offshore Guinea Bissau.
Whilst the political risk is considered high, recent elections have been democratic
and there is potential for our view of the risk to improve. One of the blocks contains
an existing discovery that may be commercial in the current economic environment
and drilling in an adjacent block this year could provide a positive catalyst.
We rate FAR as a Speculative Buy with a 6-month price target of 9cps.



Where did this 5% success rate get announced? or is that a typo? I thought it had a much higher rate of succcess or why is ME even bothering? why would Shell have even bothered coming to the table for a 5% chance of success? I dont think thats right...