memo for auscan

Ok, after speaking to Colin Harper, FAR secretary , I asked three core questions -

1/ GB and why the delay in ministry approval.

FAR considers its a de facto approval ATM until the ministry approval. There has been NO information to apply that things are not on track. These take time and things happen slowly and the latest troubles may be the cause of a delay from the Ministry, but from past experience its a formality .
FAR currently involved with on going operations with Svenska and the local counter part to Petronsen in GB. They re ready to tender for planned 3D survey in the second half of this year and a rough timeframe to drill in 2012. He mentioned two drills one over the 240 MB site and another after analyzing current and future data. I mentioned was he surprised at how little the market reacted to GB. He put it down to timing of the ANN over Xmas as it not the best time to ANN , however , he pointed out that FAR happened to be in the right place at the right time to obtain this deal and like Senegal its very favorable terms. Delek has not been paid 600k , until the ministry approval. In general, it seems FAR are not concerned over Ministry approval and Svenska and FAR are meeting all the requirements and are very bullish in their future operations in GB.

2/ Up coming lease extension and what scenarios if a JV partner is not obtained.

FAR has taken up its two extensions to date , but would apply again and are granted a extension. This is the best option! Second option , we place a deposit of 5 million and a commitment to drill with in two years. In this time we can still obtain a JVP , but if no drilling and no partner , the deposit would be lost. I did feel that this option had to be approved and was not
automatically a given.
Thirdly, FAR walk, all data basically becomes the property of Petronsen. Obvious, he stressed this case should never happen as FAR are seeking a JVP at all cost and if a JVP was not obtained FAR would certainly push for option 1 then 2.

3/ I pointed out that a FAR ANN in 1/2009 stated that a third written offer was obtained and had any written offers been received and if so would they ANN to the public as they did previously before SHELL or just tell me...LOL

You guessed it, FAR have made a company policy that no information would be given until ra ra ra. No surprises there, but ceratinly one that had to be asked , as they did proir to Shell.


Over all Colin was very forth coming and seemed a nice fella. Very open, but certainly knew his boundaries and well informed. He stressed that the company is totally focused on obtaining a JVP for Senegal and knows its priorities. We also spoke about Envoi and how the public might view this as a set back. But he pointed out, that it was quite the opposite, as it would put a fire up any parties that are dragging their feet. IMO I feel this still implies that some parties or the big fish FAR are trying to get are not as close as we would like. But I could be highly wrong here and FAR are getting more parties to the table , consequently trying to obtain the best terms for SH. Ophir , was also on the list of discussions and we re aware that successful drills there are a huge advantage to our cause. Personally, this is a huge play for FAR and any good news from that Farm in would drive the SP north.

Tullow , he mentioned would be FAR perfect partner , nothing new there and with the HARDMAN story and TULLOW success in W Africa this is why they refer to them in the presentations.

Lastly, I asked why the latest marketing campaign , he pointed out it was actually part of an oil and gas conference in Sydney. But ME out their promoting FAR constantly. I did push the idea that he may know something that we didnt , which created a few laughs between us. But was answered with any price sensitive info would be ANN ala!

Over all, I was satisfied with GB and think thats solid. Senegal a tough one, its to hard to call if a major close, but Im quietly confident. If the WORST case was another lease extension I would be happy and hopefully FAR can secure that though the 5 million deposit or hopefully are granted an extension automatically. Anyone at AGM this is most likely boring info! Sorry.

Please DYOR as this was a phone call not in writing and as Auscan told me to ring , I did!