FAR put out a NPV of $US540M for the Sangomar Field at 2023 (in...

FAR put out a NPV of $US540M for the Sangomar Field at 2023 (in their 12 December 2019 presentation), which equates to around $Aus550M in 2020. FAR have also said the recovery factor could also be expected to be at least double that used by the JV. With 10B shares on issue that could equate to either 5 or approx 15 cents per share (the development finance required wont change with the recovery factor).

So if FAR have a large player waiting for a successful PE, then a 5% free carry may add a few hundred million $Aus. The player will need to be large and a successful offshore field Operator, because to have robust procedures and experienced development and operations personnel to apply at Sangomar will have required years of safe operations and development practice in order to have developed and accumulated these assets (robust procedures and experienced development and operations personnel).

A successful farmout and drill in the Gambia could add some value in a few years time.

But every $Aus500M value add is only worth 5 cents per share with 10B shares on issue.

So it looks like the recovery factor is the biggest factor weighing on FAR expected value, other than the intentions of Meridian which is unknown at this stage.