Significant Underestimating of Soloo Prospect's Sale Value?, page-2

VOGC,
The FAR/WPL sale also included cost reimbursements for the Sangomar field development. There was another sale made and that was by CNE which held 36.8% of Sangomar. CNE sold their asset for US $300M plus US $100M contingent payment, so we will say US $400M.

CNE details below;

2C resource 561mmboe. 206mmbo CNE 2C resource. Sale valuation US $1.94/bbl = US $400M
2P resource 231mmboe. 85mmbo CNE 2P reserves. Sale valuation US $4.70/bbl = US $400M

So if we use the CNE 2C valuation when assessing FAR's potential if Soloo is a discovery we get;
2C resource of 84mmbo x US $1.94/bbl = US $163M (AUD $226M) valuation for Soloo.

What muddies the water is that oil was under US $50/bbl at the time of the CNE/WPL sale and so an increased value at today's price may have been achievable. CNE had spent more than the US $400M on exploration drilling prior to the sale and sold at a loss. Mind you, FAN1 which was as far as I can see added no value to the sale cost CNE a packet and the cost of that well probably resulted in them selling Sangomar at a loss.

If all Bambo 1 targets are discoveries then FAR's 2C would be 475mmbo. Multipled by US $1.94/bbl then FAR could potentially be valued at US $921M (AUD $1.28B) using the CNE sale metrics.

Now if we use the COP/WPL transaction then I think WPL used FAR's RISK 2C valuation of 561mmbo to arrive at a sale value of US $2.20/bbl cost. From memory, CNE's 2C was only 484M barrels at the time but I am not 100% sure.

So if we use the COP/WPL 2C sale price of US $2.20 which is 13.5% premium to the CNE/WPL sale and also occurred when oil was trading below US $50/bbl, when assessing FAR's potential if Soloo is a discovery, we get a valuation of US $185M (AUD $256M) for Soloo.

So a fair valuation for a discovery at Soloo would be between AUD $226M and AUD $256M. ($2.26 to $2.56 per share)
A fair valuation of a discovery is confirmed at all 6 Bambo targets could be between AUD $1.28B and AUD $1.45B ($12.80 to $14.50 per share)