Eventhough this article is over 1 year old Hartleys explanation...

Eventhough this article is over 1 year old
Hartleys explanation explains why a supermajor like shell would consider spending several million on aquiring csem data and acquire a 70% holding in the three blocks and become operator ......

First Australian Resources Limited (“FAR”, “Company”) has completed initial seismic processing of its offshore acreage in Senegal and
uncovered a potential monster.

Senegal Seismic Surprises
FAR’s main targeted play in offshore Senegal was originally Santonian age fans. Three of these
structures have subsequently been identified by the recent 3D seismic with potential closures in the order of 30km2.

Each of these fans is prognosed to contain up to 750mmbbls of oil in-place. In addition to this, a different play, known as a buried hill, has been indicated by the seismic. The prospect in this play dwarfs the potential in the fans originally targeted with an estimated structural
closure of 178km2.

This is a step change in expectations for the
potential of the acreage from over a billion barrels of oil in-place to over a billion barrels of oil recoverable.

it is likely that there will be keen interest from the majors, which should see deal flow later in the year. A deal could see FAR free-carried through the forward exploration program whilst retaining a high percentage ownership.

This creates potential for a revaluation of the
Company and leaves the equation of “downside risk vs. upside potential” heavily skewed to the upside.