FAR (ASX) Keeping tabs on value and history

Originally posted by Kfann ↑

Hi all,

Every now and then, I do a look-back to see how management are really spending our $ and what they're achieving with them. I do this (in context with other metrics like estimated additional resources and likely spend to FID) to assess if I'm better or worse off participating in each CR...or waiting until later.

History: Far were essentially free carried through FAN1 and SNE 1 which CNE announced pretty quickly had 2C resources of 330mmbbls in Nov 14. In Aug 16, FAR announced after BEL1 and SNE4, 2C of 641mmbbls. So FAR have essentially been using funds to increase this resource base by 311mmbbls.

FAR only start dipping into their exploration pocket in Sept 14 so between than and end June 16 (the point at which Bel1 and SNE had been taken into account), FAR had spent a total of A$122.5m on all exploration efforts (according to their 5B's). Lets assume that $7.5m has been spent on other non Sangomar Deep projects which leaves A$115m. I also note during this Sept14-June16 period they spent A$6.91m on admin...this is only 6% of exploration spend which is more than reasonable in my experience.

Anyway, they spent A$115m of shareholder funds to find an additional (311*15%) 46.6mmbbls at A$2.47/bbl (or US$1.85/bbl).

This is a metric that almost very oil exec would sell their souls for.

By the end of the current 3 well program (I'm not including the 4th exploration well yet), they would have spent an additional A$43m (my estimate) which could see a 15-20% (my guess) uplift in resources (due Sept Qtr). This'll equate to adding resources at a cost range of A$2.24-2.98/bbl.

Still an amazing performance metric.

So they ask for $80m to spend on:
- an additional Sangomar exploration well (cant wait for this one!),
- upgrade prospects and possibly drill one well (largely funded by their new Yuan buddies?) on their high interest/high impact acreage
-More 'opportunities' (my expectation) as the CNOOC/FAR alliance develops.
-SNE FEED work.

(I don't believe for a moment they they are going to disappear into the relatively boring news and SP black-hole that FEED work normally creates)

So I'm more than OK with all that. And why not?

We have 15% of a truly world class, high quality oil system here people! I suspect many of the more impatient posters on this chat site really haven't fathomed what that means.

More History: 34 years ago, Woodside struggled to hold onto just 16.6% of the NWShelf and had to dilute shareholders 400% (sold 80% of themselves to BHP and Shell) to do so. Gee, only a 50-bagger since.

So stop the BS whingeing about 'dilution' and back a future (potential) WPL.

Cheers,

PS. I absolutely love it now the SP is no longer under the PE spell. Only upside (huge) from here in that regard.

Expand

And COP had 35% of this truly world class, high quality oil system and sold out for, was it $2.20 per barrel of 2C resources.

And CNE has 40% of this truly world class, high quality oil system and want to sell out.

And the market still doesn't know how high the quality of this oil system is because they don't know the connectivity of the resource and this is the reason why CNE have applied a low RF to the 400 series sands.

Yep, this is surely a high quality oil system. GLTAH.

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(20min delay)
Last 52.0¢		Change 0.000(0.00%)		Mkt cap ! $48.05M

Open	High	Low	Value	Volume
52.0¢	53.5¢	52.0¢	$17.03K	32.56K

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