Morgan Stanley - First Take: Building on the core... First Take:...

Morgan Stanley - First Take: Building on the core...

	Column 1
0	Column 1 0 Column 1 0 First Take: Building on the core Column 1 0 Column 1 0 Column 1 0 Read Full Report​

	Column 1
0	(PDF: 7 Pages)​

[/table][/table][/table][/table]

	Column 1
0	Column 1 0 Column 1 0 Asia Pacific Stock Rating   OverweightPrice Target   A$0.13 Adam Martin March 27, 2017

[/table][/table][/table]

	Column 1
0

	Column 1
0	Column 1 0 FAR has announced a farm-in deal with Erin Energy. The deal expands FAR's acreage position with an additional 80% interest in two blocks immediately south of the existing SNE discovery. We view this transaction positively.

[/table]

Column 1

0

FAR has announced a farm-in deal with Erin Energy Corporation. Erin Energy is a Houston-based exploration company focused on Africa. FAR plans to make an upfront payment of US$5.2m and fund up to US$8m of Erin's share of drilling costs of a well potentially in late 2018. The high equity interest is a positive, in our view, as it allows FAR to complete a further farm-down prior to drilling. What are the next steps? FAR and Erin will complete seismic reprocessing and mature prospects for drilling in late 2018. We think there is the potential for FAR to further farm down this prospect, given its high working interest (80%). The region is also attracting significant interest from industry, given FAR's SNE and FAN discoveries plus Kosmos's gas discoveries to the North. FAR originally farmed down its SNE and FAR drilling commitments with Cairn Energy and ConocoPhillips. We remain Overweight. FAR's SNE resource continues to grow in size, and there remains significant exploration potential around the existing discovery, given the frontier nature of the region. We expect the commercialisation path to become clearer over the next 12 months. Any further exploration success could be high-value, given the potential to tie in and commercialise through the existing SNE discovery. Read more... Column 1 0

	Column 1
0	AUTHORS

	Column 1	Column 2
0	Column 1 0	MORGAN STANLEY AUSTRALIA LIMITED Adam Martin +61 3 9256-8904 EMAIL

[/table][/table]