If FAR were to obtain finance on current 2c and targeted flow rate at 10% interest, the break-even price is about $54.50/barrel. This is where the NPV (10) is zero. Doesn't mean the company is not making money. On the contrary the undiscounted share value is about $AU 30 cents.
Problem is getting finance. I have / follow some mining stocks. The trend there seems to be setting up off-take agreements with the customer(s), who in turn provide the finance or a good part thereof. FARJOY mentioned a similar possibility through forward sales. So if the 15% is retained and the JV is sucking 120,000 barrels a day, that would be 18,000 barrels a day to a potential customer. This is where I am blank. I have no idea if this would be an attractive enough amount for any refinery / downstream operator to provide the finance.
Above figures should not be relied on. The above ignores PE which could make a big difference, but not holding my breath.
A rising oil price will improve sentiment overtime. Problem is the market knows ATM it is an artificial setting and there is a potential glut should the deals fall over, not to mention the shale operators roaring back into action once the price stabilises a bit higher.
I'm staying in until at least the next lot of drilling results are out. I think the risks of this investment will be substantially mitigated if the recovery factor doubles.
IMO DYOR Etc
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If FAR were to obtain finance on current 2c and targeted flow...
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Last
50.0¢ |
Change
0.000(0.00%) |
Mkt cap ! $46.20M |
Open | High | Low | Value | Volume |
49.5¢ | 50.0¢ | 49.5¢ | $43.20K | 86.49K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
1 | 21776 | 50.0¢ |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
50.5¢ | 94070 | 2 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
1 | 33702 | 0.495 |
1 | 99999 | 0.490 |
2 | 104597 | 0.485 |
3 | 160000 | 0.480 |
1 | 100000 | 0.475 |
Price($) | Vol. | No. |
---|---|---|
0.505 | 94070 | 2 |
0.510 | 200000 | 2 |
0.515 | 120000 | 2 |
0.520 | 335203 | 4 |
0.525 | 118000 | 2 |
Last trade - 15.57pm 23/08/2024 (20 minute delay) ? |
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