FAR (ASX) Nice Volume Today

Originally posted by PhillW ↑

Whisky,

I don't recall criticising management over operational performances. I do recall critiscising management over share price performance and their lack of action to address this. You would make a good politician though with your statistics etc with regards to COP and CNE share price. One fact you left out is that both those stocks have rallied from their lows and are sitting 10% below their 2016 highs. I'm sure if FAR was sitting at 10.5c the criticism would not be so vocal. Before the capital raising FAR had a market cap of over $400M and $30M cash. Today they have a market cap of $340M which includes $90M cash.

The point I am trying so hard to get across is "What Have Management Done To Increase Shareholder Value" which is measured by share price performance?

Now 88E have listed on the AIM and are in the process of applying to be listed on the Nasdaq. Why would 88E bother to do this? Well the AIM listing was obviously done to attract funding from an oil & gas financial hub but the Nasdaq listing for obvious reasons is being pursued because their flagship project is in the US.

Now call me simple but FAR management should have realised back in Oct 2014 after FAN that it looked like they may need to raise serious capital. Where is the major hub for capital for Oil & Gas especially for Africa? You guessed it, London. Why wasn't an AIM listing considered? Now I would like to see CN's travel itinerary since Oct 2014 and see how many times she flew to London and still the penny did not drop. The fact that the African Oil Conferences take place in London and FAR's flagship project is in Africa, and still the penny did not drop.

My view is that FAR management have been complacent with regards to share price performance. They have taken the stance that if we keep doing this that and the other thing that as CN has stated "The Share Price Will Take Care Of Itself". But as you say, oil prices have dropped to the lowest levels in a decade so raising capital in that environment was still an outstanding achievement. Raising capital was, but we will never know whether a AIM listing with a greater audience would have resulted in a 8.5c or higher placement price. But if we had seen that management were working on improving the share price and 8.5c was the best price they could get then at least we would know that management have been doing everything in their power to assist with a higher share price. FAR management are being reactive and not proactive. Their Corporate Risk Management Assessment obviously did not identify share price as a risk and that's if they have done one (Board Failure if the case).

To put it another way, not actively pursuing an AIM listing is the equivalent of advertising in the Burke Gazette compared to the Australian. One has a larger audience than the other. 88E management seem to have recognised this and FAR management have not. FAR management did not recognise this because of complacency. Surely, it must have crossed CN's mind on her umpteenth flight to UK and Europe that an AIM listing may have been a good idea! You know, if you've identified that the money you need is in that vicinity, surely it pays to advertise and reap in the benefits of all the free press from Malcy and the UK brokers and news outlets doing write ups on CNE etc .

Now I haven't even covered the benefits of fixing up the share register for the ASX because that has been covered previously.

Whisky, you and others are now stating that the RISC report will probably have little bearing on the share price. You have gone over the last few months from bullish to flat to say the least. Now I ask the question that if the RISC report as you fear does not result in a significant share price re-rating then what in your opinion will do so by Xmas when FAR could quite possibly be rattling the tin? We know the FAR managements crystal ball is just as broken as everyone else's otherwise they would have seen $26 oil on the horizon so please don't tell me they have placed all their hopes on a rising oil price into a drilling campaign. If the case, they are doing exactly what I have been trying to get across to the masses and that is they are relying on events outside their control to dictate FAR future share price performance.

Good management are proactive and look to mitigate risk. Shareholders see risk in FAR today as being diluted to hell. FAR management see the risk as getting enough funds to continue drilling and get DOC. The two are not necessarily aligned, especially when FAR management through the benefit of options and bonuses do not face the same dilutionary effect as the share holder that pays their wages.

The FAR cheer squad over the course of 12 months have gone from a $1 party to a I hope we get 20c party. Why is that? The SNE field is getting larger by the day, but unfortunately every share holders holding is being diluted.

I was invested in CVN in the late 90's when they finally discovered oil off of the NWS. That discovery whilst small in comparison to FAR's would have been a Disallowed if discovered 12 months earlier but the fact that oil was trading at decade lows made the discovery un-commercial and was P&A until higher oil prices. I dare say Apache would have paid them out at some low ball price because an explorer needs cash because I cannot see that CVN are getting income from oil on the NWS. I bring this up because management should be concentrating on what they have control over as a means to mitigate the risks of events that they have no control over. Wouldn't it be an absolute shocker if DOC was released in 1H 2017 and the oil price was trading at $35 and Dec 2020 futures oil price was $44. Can't happen you say, but it did happen in 2016. A takeover with the enlarged share base if a capital raising occurs at 8c would probably be 12c or there abouts.

TIME in MARKET = RISK - the longer you have funds tied up in an investment the greater the risk.
REWARD MUST BE GREATER THAN RISK

Risk for investors is also missed opportunity like the gold/silver 10 baggers. That is possibly why the FAR sp is weak. Investors see better value elsewhere. It is up to management to promote to investors why FAR investment is better than other investments.

A measure of FAR managements performance could be made against 88E lin 2017. Two companies where management seem to have different priorities. Time will tell.

CN's statement "The Share Price Will Take Care Of Its Self" displays the priorities of the FAR board. All mining companies I have been employed at conduct annual risk assessments on the business, maintain a risk register and continually work towards mitigating those risks. FAR, being a company not in production does not carry the vast areas of risk of a company in production so a simple risk assessment should have been quite simple and should have identified funding as one of the primary risks and that being the case steps taken to reduce or mitigate the risk. What I have been saying is the FAR board either have not carried out a risk assessment (bad business) or did not identify funding as a risk (bad risk assessment) and I think it is the latter when you take CN's comments into consideration.

A risk assessment for FAR should have identified POO, DOC etc as risks also and a plan drawn up to reduce or mitigate the risks. All big businesses do this and the board that everyone has so much respect and endearment for should have had the experience and knowledge to have carried out a risk assessment and a plan to mitigate those risks. I wonder if you asked to see the FAR risk register whether A. they would have one or B. whether they would let you read it.

Instead of making that statement, "The Share Price Will Take Care Of Its Self" which in hindsight was a cocky fob off of who ever asked the question, a good manager having already identified funding as a risk would have responded, we are concerned about the sp performance and identified sp performance as a potential funding risk in regards to share holders share dilution and are doing this that and the other thing to mitigate these risks which should have a flow on effect to the share price.

Expand

Very well put phill w .its easy to say the share price will look after it self ,when you are getting free shares ,on top on shit load of pay .I really don't think that MD give a sh.it about share holders ,and why don't the board state that if the share price fall below the capital ,say 8.5 c then they would not be entitled ,to their free shares .A the share holders would have more fate in the MD and B the shares would not be diluted ,every one wins .THEN THE SHARE PRICE WILL LOOK AFTER IT SELF .

(20min delay)
Last 47.0¢		Change -0.015(3.09%)		Mkt cap ! $43.43M

Open	High	Low	Value	Volume
47.0¢	47.5¢	47.0¢	$9.995K	21.23K

No.	Vol.	Price($)
2	71033	0.470
1	50000	0.465
1	50000	0.460
1	1822	0.450
1	3000	0.445

Price($)	Vol.	No.
0.480	50000	1
0.485	50000	1
0.490	54000	2
0.510	100895	2
0.520	225286	3

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