Malcy

https://www.malcysblog.com/2019/12/oil-price-far-petrotal-touchstone-and-finally/

If anyone still cares what the revered soothsayer has to say...
"Modest dilution" strange definition of modest, but he's never been a numbers type of guy?
No mention of 35c......after all he is only 31c out.

Far Ltd

After Far Ltd had announced a trading halt on Tuesday of last week that was followed by an announcement on Thursday confirming that it had completed an A$146m conditional placement to institutional and sophisticated investors at A$1.0425. This was a discount of 21.3% to Monday the 9th but a more realistic 12% to the 5 day VWAP. In today’s announcement the company say that they are very pleased with the response from existing shareholders including their largest holder who has increased their holding in the company ‘substantially’ in this raise. The company also announced an SPP to existing eligible shareholders for a further A$30m with formal documents for this out today in which the company’s directors are all taking up their full entitlements.

The reason for this raise is to fund development capex to first oil of the now named Sangomar Oil Field (SNE) along with already announced US$350m Senior debt facility and Junior debt facility of US$150m, Far’s share of costs of capex to first oil is US$492m as discussed in previous blogs in which a mixture of equity and bank debt was thought to be the best option.

The very fact that Far are involved in the development of Sangomar at its commencement is no small achievement to a company described by the Chairman as a ‘junior’. Blog readers know that I have huge respect for Far and its leading team of professionals bettered by few in the industry and that they fully deserve to be here after playing such an important part of its discovery. With the FID imminent, when the Presidential approval of the development and exploitation plan is given, works can ‘commence early in the New Year.’ If all goes to plan the first oil is expected to be expected in early 2023 and at 100,000 b/d will create fcf to Far of US$180m per annum.

I have followed Far for quite a while and think that it has done an outstanding job getting to where they are now and whilst shareholders have suffered modest dilution in the process of funding Senegal, they are approaching a massively important time as FID approaches which they fully deserve to be participating in. In the meantime Far have an exciting portfolio of prospects to drill in the next 18 months which they are as well placed as anyone to succeed.