west 2 dropping back ??, page-35

What do we know?

We know that the CR dilutes SH value so that if the fundamental value of the company should stay the same basically the SP should nearly halve. However, we all know that's not what its all about. It's all about what the company is going to do with the funds and it's overall future outlook.

An IPO is essentially a CR and some go up some go down and some stay the same.

A company in finacial distress that raises funds will bounce upwards if it's future is suddenly more rosey due to backing. Negative uncertainty will always push the SP lower. Once that's taken away the SP bounces (dead cat). So even though the raising of funds, which has possibly diluted value the sp goes up as the negative uncertainty is taken away.

So the question is for FAR what weighs the most, the positive or the negative uncertainty? As we know that basically our holdings are now relatively speaking worth half their value (leaving aside the sp increase and our option to participate).

Negative/Positive uncertainty:

Decree for Senegal and Guinea Bissau are not yet formalised/approved,

Will the new SH dump the new shares onto the market or will there be an escrow period?

Another major partner for Senegal,

Drilling in AGC Profond/Kora,

New targets from 3D in Guinea Bissau,

Regional successs in other non-owned projects and

Other deals as mentioned by ME.

So now the question is specific to the individual. What's your appetite for risk?

If you think that the positives outweigh the negatives and you want a first in best dressed approach but you could leave without the shirt on you back then you're already in.

If you want to wait until more certainty then you'll wait for Senegal approval but obviously you'll have to pay more if it comes through.

And the list goes on...

Personally I'm prepared to wear the CR and I'm hoping that ME was smart enough to put an escrow period on the new shares. In my view they needed the money to do WA properly. The company is in a far better position than a year ago. So it all comes down to uncertanty and there's one uncertanty that I'm not afraid of, the fear of missing out as I'm already on-board as I believe the positives outweigh the negatives.