The new block, page-16

Hi Clement

You are right, the original stated unrisked P50 potential for Senegal was stated by FAR as 3.5 billion barrels, so no, 2 billion not necessarily fanciful at all. Its just that it's oh so vague and unsubstantiated. Neither Farjoy or our friend of a friend have indicated whether they are talking potential Oil in Place, P50 recoverable, risked or unrisked. As Rolling once pointed out "a billion here, a billion there", sounds good but what does it all mean??

And Gridder sorry to be a perennial wet blanket, its just in my nature to try and evaluate what is being claimed, and in this case I have assumed that our friend of a friend is talking 2 billion unrisked P50 and in that case according to my back of the envelope calculations FAR will be paying US3c a barrel vs Cairn's original US8c a barrel before oil was even discovered. Admittedly the oil price has fallen since then but even so, given the shallower waters and upgraded prospect values because of the oil discovered next door, if the potential is for 2 billion barrels as above it either suggests that FAR have got it on the cheap or the potential is less or there is a lot more work to be done to upgrade leads to drillable prospect status.

So yes it may turn out to be a bargain, but for the moment, Dangar's clever post in my opinion says it all.

pj