$50 Brent is heart break for FAR shareholders. Sangomar is...

$50 Brent is heart break for FAR shareholders. Sangomar is fundable and valuable at the current oil price. The singular most important mistake made by the management team was approving FID without the funding locked down. If FID hadn't been approved by FAR then we wouldn't be in the hole we are today. PE was also a misjudgment when they should have been focussing the development.

$50 Brent has also turned my mind to what next for FAR.

What do we have?
1. A decent amount of money in the bank - US$130m cash. I don't know of any other junior oil and gas company with this kind on financial capability.
2. The Gambia with 152 MMstb extension of Sangomar at Soloo and Bambo prospect. Key question is whether Soloo is economic independent of Sangomar.

What are the opportunities out there?

Seems to me drilling Soloo(/Bambo) makes sense assuming the economics are attractive. Do we farm down further for exploration drilling to manage risk?

Some companies are focussing on accumulating distressed assets at the bottom of the cycle. Sangomar was such an opportunity for Woodside, but too much for FAR. Is there something similar that would fit FAR's balance sheet and play to the strength of US$130m? CVN have to find a way to fund their Dorado development - perhaps a merger makes sense.

Key issues going forward are the management team which is unfortunately has failed to display the commercial acumen to capitalise on the Sangomar success. The management of the company requires a revamp. Is Gambia politics an issue? The West African countries are developing and becoming increasingly independently minded which could be good or perhaps not.

Regardless FAR has to find its next niche where it can be successful. It was successful as an explorer but good opportunities are as rare as hens teeth (once in 15 years) and I don't think "the market" is as interested in pure exploration plays as in the past. The new FAR will be something different I think.