senegal activity

Senegal Activity FAR -ASX

Far has been extremely oversold more than most small caps so Why should one continue to hold Far after a 60% gain over the last few days. lets see :

West Africa along with the Deepwater Gulf of Mexico continues to be viewed by
industry as one of the few regions outside the Middle East capable of hosting big enough
deposits to attract the major oil companies. (Refer Herold Oil & Gas Perspectives Jan 5,2007)

Recent information from FAR ( Refer ASX 31/10/2008 Ann ) has stated 2 firm offers from major oil companies with a 3rd offer pending .

A recent auction of acreage in the Congo Basin, offshore Angola for three deepwater
exploration tracts saw international oil companies bid in excess of US$3.1 billion in
signature bonuses alone, reportedly the highest ever offered for exploration anywhere in
the world. (Refer ASX FAR 15/02/07 )

Petrobras, has acquired a 40% interest in an adjacent block from Edison spa and involves refunding a portion of the past exploration expenditure and contributing to future programs. In fact FAR’s 2050 sq km 3D survey follows Edison’s recently completed 1500 sq km 3D in the Rufisque Deep Offshore block adjacent and to the north.

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Tullow Oil PLC has successfully bid AUD$1.5 billion for Hardman resulting in a
tightening of the pool of listed entities controlling acreage along the Mauritania-Senegal-
Guinea Bissau Basin in West Africa.

Whats the current Market cap of FAR = Approx $15 MILLION ? Possible T/O

With the loss of Hardman Resources to Tullow Oil, FAR is the only ASX listed company that provides significant leverage to offshore West Africa while this region offers some of the most prospective large reservoir targets which are being increasingly coveted by the major oil companies.

As the targets are deepwater (minimum 200m depth), drilling costs are likely to be high (say US$20m per well) and hence some degree of farm in is likely by one or more of the major oil companies. We are hoping that the analogy will be similar to that of Hardman Resources where this company worked up the offshore Mauritania targets before attracting Woodside to fund the expensive drilling program.
In fact if we follow the share price performance of Hardman during this time, we see a substantial uplift in share price after Hardman had negotiated the Woodside and Agip farm in agreements but before the first discovery at Chinguetti.

With very substantially large volume traded over the last week and FAR hitting a 20 year low 1.9 cents a rise to 20-30 cents before the end of January could easily be reachable
( that’s if the DOW holds up ) with Senegal being the main reason for FARs future price target also supporting the price near term will be news regarding NE Waller , pitchford 1 and 2 , and Stokes Bay ….. Merry Christmas