The Value of FAR in a T/O

Have just come from a couple of hours on the beach, absolutely fantastic day in Perth, and spent most of the time pondering where FAR is headed, following are my thoughts.

First consider what we have. I won’t go over the extent of the discovery as there are already very knowledgeable posters covering this plus the 2C results should be released shortly and with the planned addition appraisal Q4 2015 the provisional figure of 330mbo for SNE can only increase IMO so the SP will (as CN stated) take care of itself as the JV prove up the blocks.

So what we have is as follows :

1. FAN is the problem child and the JV will undoubtedly have to appraise and possibly an exploration well or two to fully assess what they have found however the JV have consistently stated it has the potential to be commercial.
2. SNE is being touted as commercial by all partners in the JV including the Senegalese Govern and Petrosen
3. CNE have announced that the JV requires min 200mbo to be a standalone development, states that the preliminary 2C results for SNE of 330mbo has been confirmed by an independent audit carried out by ERC-Equipoise
4. CNE have announced they have opened an office in Dakar staffed by expats and locals.
5. CNE books ~170mbo for SNE and issues initial inquiry to the market for the supply of a FPSO

I realise that some posters say that appraisal is necessary before a discovery is declared commercial but the above says it all IMO!!!!

From the above it’s an easy step to conclude that the JV is rapidly progressing the development of SNE into a producing field that will more than likely be designed to also accept production from other future prospects so if it isn’t taken over in the journey to development FAR will be transformed into an oil E & P company!!!


For a T/O to succeed the T/O company MUST convince two very important parties without whom any T/O will fail and those are the management plus FARJOY both of which will have a dammed good idea whether FAR will succeed in obtaining finance or if FAR has already ann’d the finance just what the production will be worth too FAR. I also have no doubt that when Senegal goes into production the POO will not be what it is now!!!

I’ll now leave it up to individual posters to place a value on FAR when the JV are producing at a rate of say 120,000bpd as this is the figure would give a good idea of what management and FARJOY will accept in any T/O!!!!

It will be interesting to see what figure posters come up with.

HKP