Given the state of WPL's business and the reserves base and the fact they have not had a win in a very long time in the open marketplace, its not impossible for WPL to make an offer for FAR. I must also mention, doing business in fossil fuels in Australia is becoming harder each day and more expensive.
To operate the Senegal JV is pure cream, you get paid 50% of all costs and we all know how costs are allocated within JV's. In reality a great number of your staff costs are paid for by others within the JV. JV financial audits are excruciatingly painful and I've not met a CFO that hasn't loved JV's when the company is the operator.
WPL as the Senegal JV operator for the next 30 to 50 years will be a once in a career decision for WPL's Board and Woodside CEO Peter Coleman and his management team. A 30-50 year income stream locked in at 2016 values on today's resource numbers. An outstanding proposition if I do say so myself.
If one paid $1.5 billion for FAR (MC$350M) a multiple of 5 at a oil price or US$48.00 imagine the return at an oil price of US$60 averaged over the next half century? Don't forget further upgrades will continue to arrive and grow the resource base.
FAR can't operate the JV, simply don't have the expertise, WPL do and they are cash rich.
In terms of FAR having a third party in the wings, they may have, however to operate an offshore oil business successfully this limits the options as to who this third party may be! Not all existing offshore oil operators have the space cash required for the 35% nor the desire to enter the area. With the North Sea declining may be somebody form this region is in the wings?
In summary, I wouldn't miss how this plays out for quids, it may be the takeover of the century and prove yet again, small exploration companies (FAR) find resources and big energy companies (WPL) bring them to market.
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