Malcy's thoughts on the deal

Cairn/Far

Brief thoughts on the Woodside deal to acquire the COP 35% stake in the three Senegal blocks for $350m +$80m on completion. I am waiting for a call with Far and will add more either today or in more detail tomorrow as time is short. My initial take is that Woodside have done way the better side of this bargain although COP had handled the sale badly and telegraphed the sale all round the market. Historically they are not good traders in these situations but at least with a keen owner it means that development will probably kick on, as WPL have said that they will fast track to near term production and take over the operatorship. Buying a class asset at $2.20 is outstanding and COP have given away an asset in order to pay the dividend, such things happen in these markets and WPL will in due course be applauded for making a superb, counter cyclical move. With WPL and Far using the same reserves data one can be sure that Far consider their stake in the licences to be way higher than their current share price.