IT all comes down to CNE

We still focusing on what whether FAR is going to pre-emptive, can FAR raise the funds etc.

That is all immaterial in my view.

FAR JV partner is CNE, they a Scottish and have played in the big oil game extremely well for many years.

After CNE phenomenal success in India, CNE has spent the last say 10 years exploring along the Atlantic margin from offshore West Greenland to Senegal.

After all of that massive expenditure the best success they have had is in Senegal (the North Sea fields are not company makers for CNE).

Then Simon T of CNE says that SNE is a world class asset directly after SNE 4 TD.

Here is CNE cash and forecast from Jan 16

End Dec 2015 cash of USD 603 million and Forecast development expenditure for 2016 and 2017, taking the UK development projects through to cashflow generation, is US$492m; and remaining currently committed drilling and seismic E&A expenditure 2016 is estimated at US$122m, predominantly in Senegal. Outstanding Norwegian tax rebate receivables are US$32m. Plus a Reserve Based Lending bank facility remains undrawn, with availability to fund North Sea development capex currently estimated at US$300m,

The COP sale is at only USD 2.2 per barrel and doesn't include the enormous upgrade which I predict to be announced soon.

Now if CNE decides to pre-emptive and take all of the 35% (assuming FAR doesn't exercise) from the COP sale which they can easily afford USD 430 million (current cash and possible loans or new facility) where does that leave WPL?

Up a creek with out a paddle.

The one and only way WPL can be certain of getting control of any percentage of COP 35% is by gaining control or influence over  FAR.

Now there are two ways WPL can do that

1, Reach a deal with FAR to fund FAR pre-emptive rights ie 9.54% (assuming CNE take there 24.54%) which FAR on sells to WPL for a profit.

Not likely and why would WPL be happy with just 9.54% and why would FAR sell WPL any more than passing the COP pre-emptive percentage as FAR is fully funded for the next few wells plus the upgrade about to come.

2, Launch a on market bid for FAR to be completed prior to the time deadline of the pre-emptive rights which takes minimum of 43 days to complete and end up with 15 + 9.45 = 24.54%.

So who is WPL going to call....Merrill Lynch