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09:03
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Originally posted by PhillW
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Here's something to ponder for the FAR 5 & Disallowed believers. I have asked the question a few times on this forum about how do we place a proper valuation on FAR. After all, when a research paper comes out and values FAR at 11c etc the consensus is that they are down ramping hypocrites. What matrix does everyone use. A question for those that believe a FAR share price of 30c is achievable within say the next 2 years. Has anyone sat down and put pen to paper to determine what needs to happen for FAR to achieve this? Don't forget the risk of further share dilution if FAR is to drill the 7 wells next year which Mirabaud thinks and if the case you would have to be worried that any future share price rally will be a sucker rally for a capital raising at 20% below the price when announced. Do any people when they're factoring in $100 or even $80 prices per bo know what the chances are of achieving those price levels and sustaining them? Probably close to zilch! The USD is in a generational bull market and historically commodities trade inversely to the USD for one good reason! They get TOO expensive in foreign currencies and the regular people cannot afford to buy as much so consumption of said commodities fall and if consumption falls far enough you normally end up in a recession. But in the same environment producers get more efficient and thus produce at lower costs, technological improvements assist in lowering costs and it goes on. The high cost producers go out of business (iron ore). The great commodity bull in the early 2000's was assisted by the USD falling from above 100 on the TWI to 72. With today's exchange rates and the USD threatening to blast through 100, if oil was to climb to $80 and stay there then that is liken to $120bo back in 2007 for the EU and Britain. Oil traded above $120 for 7 months and then we had the 2008 crash! So unless people have crystal balls that are showing them a global bull market has spawned and the USD has started to fall off of a cliff then sustainable $80 oil is but an illusion.
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Hi Phil, I went through that exercise ages ago and came up with a ballpark figures of 22 cents a share for every billion barrels found by the JV. I'll see I'd I can dig up the post but from memory my assumption was only one third if money retained after tax and PSC (worst case scenario), costs of around $32-35 a barrel (we need confirmation of final costs still - doc time?) and future price of 50 or was it 60 a barrel?
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