Woodside's showdown in Senegal, page-318

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richcy

276 Posts.

16/06/17

11:24

Post #: 25313658
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Originally posted by Buffalo ↑

Kfann, thanks for the accolade. I however don't have the answers and generally wouldn't discuss them on a public forum if I thought I did as I've been around long enough to know answers only exist with hindsight.
I agree with your sentiment experessed above and thanks for alerting me to the COP filings - I was unaware of this and find HC a great source for this type of background info.

With no intention of defending or substantiating my opinion (or offering answers), I ask the following rhetorical questions:

1. What was the intent of the JV partners when including the PE provision in the JOA?
- Was it to exclude certain possible partners, perhaps as a partner of insufficient financial standing could delay project progress?
- Was it to provide a mechanism whereby a remaining member could block a sale to a party with a perceived conflict of interest?
- Was it conceived as a method whereby remaining partners could gain benefit if a party sold below fair value?

2. If (and I hate speculating) the transaction has settled, what damages has FAR suffered and how are these quantified at date of the transaction?
- I'm sure the COP legal guys will be all over this claiming it was a fair value at the time based on then current information and that FAR are only making PE noises now that further positive field data has been revealed, accordingly, what did FAR loose?

3. Does a PE right have an inherent value?
- Would a third party be willing to purchase it at inception and if so, how would they value it?
- If it has no market value, what could FAR have lost?

4. Why did COP settle with WPL after FAR had expressed an interest in PE, and what were the terms in the FAR expression of interest?
- Did COP believe FAR could not perform at the level of WPL?
- Did FAR state "we hereby excercise our right of PE" or did they say "we are unable to advise you if we are interested as we require further info from you"?

In broad terms, you either own property or you own a right to a process. PE is effectively the right to acquire property. It appears FAR have been denied this right and the JOA has a provision for dispute settlement via a process of arbitration on which we have little specific info which we require if we want to predict an outcome.

It appears COP acknowledged FAR's PE right when they provided information on their sale to WPL (although this may not be correct). FAR then requested further info on the sale which COP did not supply, opting rather to settle the transaction with WPL.

I don't have time presently to continue this, but hopefully you understand the transaction will have many twists and turns and any outcome is unpredictable on the information I have.

Expand

perhaps the other question is
has COP agreed to participate in arbitration with FAR on its pre emptive rights?

FAR Price at posting: 7.5¢ Sentiment: None Disclosure: Not Held
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Woodside's showdown in Senegal, page-318

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