Significant Underestimating of Soloo Prospect's Sale Value?, page-3

Hi PhillW,

The US$1.94/bbl value has been calculated using what appears to be the addition of 2P + 2C volumes = 561 mmbo. The 2C volumes constitute Contingent Resources - these are not deeded as currently economic - and thus by industry standards are not used in estimating sale volumes. The buyer would be paying for oil volumes deemed uneconomic!

The industry standard would be to use the 2P volumes = 231 mmbo thus US $4,70/bbl

Cheers
VOGC
(ps I have tried to post a more detailed explanation but am have issues with posting it for some reason)

"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."