The situation with FAR is significantly different to HDR in...

The situation with FAR is significantly different to HDR in relation to the risked value of the prospect.

At the time Hardman was in play the key techology was 3D seismic and Direct Hydrocarbon Indicator [DHI]. DHI had issues with gas and was suspect in some conditions depending on rock densities. This meant that wells had around a 1 in 9 success rate for commercial discovery resulting a risked discount of 10%.

For valuation purposes if you allowed $5/barrel for undeveloped offshore oil and you owned 20% of a 500 million barrel trap positive on 3D+DHI you would own 100 million barrels of that trap. At $5/barrel you have $500 million unrisked but for company valuation purposes you use the risked value which is now 10% of that value - $50 million.

From my reading of CSEM it seems that a postive combination of CSEM + 3D seismic would produce a risked discount closer to 50% and in the above case the company valuation would be $250 million.

Thus you should get a higher share price valuation if the prospect is approved for drilling but there is a higher chance that the prospect could be discarded as false drilling decisions are almost eliminated.