Dexter you raise a good point & one that I'm sure we have all asked ourselves why hasn't ME ran down this path - it is surely the path of least resistance.
For what its worth heres my 2 bobs worth:
Having followed FAR for quite a number of years FAR has always been part of a small group of minnows drilling mainly small targets that are cheap to drill & also cheap to produce.
IMO Senegal is a different fish altogether with huge targets that are expensive to both drill & produce. It is for these reasons I think ME is trying to catch a big fish that can not only carry drill costs, but also have the financial ability to see the project through to completion.
Im sure he has based decisions & goals on extensive 3D survey work & the positive advice from Industry Guru Dr Igor Effimoff. Please see an article of his credentials below not a bad track record. After 30 years experience in onshore & offshore projects Im sure Igor knows what he is talking about & looking at.
I see the fact that ME has not taken the path of least resistance & diluted Senegal with a group of small players as a positive & IMO shows that the companies doing DD at present are major players. ME has been around for a long time & if he wanted to, Im sure he could muster up a group of small players to drill one hole which would be make or break. IMO this would be a last resort only to be used if FAR was going to loose the leases. I think he is aiming at a far better result for shareholders where he gets a return for shareholders with re-imbursement for past survey costs ($22 mill US) & a multi-well program in exchange for a 70% working interest. This will also set us up in GB.
While Im disappointed in his reporting skills, I do not question his negotiation skills and the fact that he is still negotiating at this late stage shows he is holding his nerve & Im still confident he will deliver us a JV deal & will get what he is asking for or very close to it. He does have the option to extend which can only strengthen his negotiation position.
If the Senegal data was weak why would he pursue the $22 mill re-imbursement & only give a 70% working interest. It just doesnt stack up. I'll stick my neck out & give him more credit than this.
Igor Effimoff has been working with Israel Petroleum Company in the capacity of geologist, geophysicist and engineer. He has over 30 years of upstream technical and managerial experience internationally and domestically, both onshore and offshore. He has been involved extensively in exploration and production, as well as business development in North America onshore, Gulf of Mexico, Caspian region, FSU, Middle East, North Africa, West Africa, Malaysia, South America and Australia. Mr. Effimoff is technically current and culturally diverse with fluency in 5 languages. From 2002 to 2005, Mr. Effimoff worked alongside Howard Cooper as Chief Operating Officer at Teton Energy Corporation. The company developed the Eguryak License, located north of the super-giant Samotlor Field in West Siberia. Teton was active in bringing the Eguryak License to 7,200 barrels of oil per day. Peak production was expected to reach 15,000 barrels of oil per day. Through negotiations, Teton sold its 50% interest to its Russian partner in 2004. From 1996 to 2001, Mr. EFfimoff worked with Pennzoil Caspian Corporation (PCC) where managed the interest in ACG Fields in the Caspian Region and was a member of the Contractor Management Committee for Caspian International Petroleum Company (CIPCO), a consortium that explored the Karabakh block, offshore Azerbaijan. While with PCC, Mr. Effimoff was responsible for many negotiations with the Government of Azerbaijan recovering debts and resolving disputes, while improving and maintaining the companys relationships with the government. Mr. Effimoff was Senior Vice President at Kriti Exploration Inc whose primary operations where in the Gulf Coast and internationally in North Africa and the Middle East. KEI also participated in projects in the FSU, Dutch North Sea and South America. With Zilkha Energy Company, Mr. Effimoff was Senior Vice President and participated in 15 onshore and 29 offshore prospects resulting in 2 and 13 commercial discoveries, respectively. Prospects were in the Dutch North Sea, Pakistan, France, Canada, Australasia and South America. Mr. Effimoff has a Ph.D., in Geology from University of Cincinnati, a Bachelors of Science from St. Lawrence University in Canton, New York, and participated in the Advanced Management Program at Harvard Business School. He is the author of numerous technical and business articles.
FAR Price at posting:
5.0¢ Sentiment: Buy Disclosure: Held
(20min delay)