FAR - FAR Limited

[porkpie324]

Re: FAR - First Australian Resources

FYI the attached link is for the presentation that was used both at the AGM and Upstream Energy Conf. I'd be very interested to hear if the one you saw was the same

Looks exactly the same to me Doc, porkpie

 

[rub92me]

Re: FAR - First Australian Resources

With EGO and now EMR going gangbusters on Canning Basin anticipation it is a bit puzzling that FAR has been sliding backwards. An opportunity perhaps??

 

[Pommiegranite]

Re: FAR - First Australian Resources

With EGO and now EMR going gangbusters on Canning Basin anticipation it is a bit puzzling that FAR has been sliding backwards. An opportunity perhaps??

I did hold FAR, but just sold out to plough into EMR for greater leverage in CB. With Senegal a year away, I still plan on buying back into FAR, but don't need to rush.

Still a great company, with a nice cash postion.

 

[doctorj]

Re: FAR - First Australian Resources

http://www.worldoil.com/Magazine/MAGAZINE_DETAIL.asp?ART_ID=3273&MONTH_YEAR=Aug-2007

Offshore Senegal , Hunt Oil, First Australian Resources and Societe; Petroliere du Senegal (Petrosen) have discovered heavy oil on the Sangomar-Rufisque Block. Few details were given, but a Senegal Ministry of Energy spokesman said that the discovery may have 1 billion bbl of oil, although it was not clear if this represents an in-place or recoverable volume

Probably a case of poor journalism (poor research) given FAR haven't announced anything (even that they were drilling it), but a nice dream none the less.

The company and the author have been contacted for clarification.

 

[debono]

Re: FAR - First Australian Resources

Hi Doc et-al

below is response I received. The attachment is a pdf and I am not sure how to attach here. Basically says that it is all good for Senegal and that they are expecting those sort of figures drilling late 2008 with production 2009.
All just optimism until we at least see some seismic results.

cheers

debono








Steve,

Attached is the source that I used for the section in my World Oil Exploration & Discoveries column in August on offshore Senegal. It appears that I misunderstood the announcement. There has been no discovery and no drilling yet on the Sangomar-Rufisque block. This was merely an optimistic statement by the Director General of Petrosen. You can view FAR's Website for an update on activities: www.far.com.au .

I will post a correction of this mis-information in my upcoming World Oil column.

Sorry for the confusion.

All the best,

Art

 

[doctorj]

Re: FAR - First Australian Resources

The attachment is a pdf and I am not sure how to attach here.

Good to see you here debono.

When you click reply, beneath the text box where you type your message is another section of "additional options". Within that box, is a section entitled "manage attachments". From here it should all be pretty apparent.

You may need to enable pop-ups in your browser to make it work.

 

[doctorj]

Re: FAR - First Australian Resources

Here are some thoughts (taken direct from my notepad) written down following today's announcement about Valentine.
- 'several metres' will refer to gross pay, as opposed to net. So the question is, will it flow?
- slow drilling indicates well concreted sandstones at the anderson/fairfield levels, so it may not flow real well
- however, if the 2 points above are true, then why stop drilling to evaluate? Why incur the added costs of intermediate logging? (is it possible this is just to provide more data for arq's surrounding tenements?)
- if there is gas, does it mean the seal on the virgin hills formation is likely bad causing gas to leak to anderson/fairfield?
- or does the continued slow drilling indicate the likelihood of a good seal on the virgin hills formation and these gases are additional (or even residual or the cause of the concreting)?
- either way, probably not an indicator of the potential of the virgin hills formation.

Discuss

 

[Trade wind]

Re: FAR - First Australian Resources

Here are my thoughts on FAR. I posted this under CIG, so I might as well post here as well:

One to keep an eye on is FAR (First Australian Resources), a busy oil junior with JVs in North America and China (Beibu Gulf), now drilling in Canning Basin (ARC the major operator). Seeing some interest on the strength of WA operation, but this one promises much bigger fish with their offshore Senegal holding (30% with US operator Hunt Oil the main partner). I'm holding to see their 3D seismic results due this quarter, after company has flagged "promising" early results. Could be very interesting, though only drilling will really tell - might also be one for down the track.

 

[Trader Paul]

FAR - First Australian



Hi folks,

FAR ... looking for a positive move, from 291202007
to 02112007, two significant and positive cycles
come into play ...

At the same time, it would not be surprising to
see a capital raising here, as a third, but
negative time cycle slots into position, as well.

happy days

paul



=====

 

[Trader Paul]

Re: FAR - First Australian Resources



Hi folks,

FAR .... will be looking for some good news, around 12-14122007,
as 3 positive cycles come into focus ... an oil discovery ... ???

... and recently, a trading bot has building or unloading a
position in FAR, without moving the price too much ...

have a great day

paul



=====

 

[coffee]

Re: FAR - First Australian Resources

I think FAR will see a spike in the sp come january. BG is spud with SGT on it's way to oil...

Coffee

 

[YOUNG_TRADER]

Re: FAR - First Australian Resources

I think FAR will see a spike in the sp come january. BG is spud with SGT on it's way to oil...

Coffee

I think your right Coffee,

FAR has 2 drilling programs under way

1) Beibu Gulf, Offshore China, follow up exploration program to last years success, success at any one of the 4 well program would add 4c to FAR's sp

Given the current rate of drilling (500m's a day) we should know if there's oil present within the next few days

2) South Gross Tete US, there are 2 components to this well, the shallow target which would add 2-5c to FAR's SP value depending on the level of Gas and Oil present and the deeper component which could add $1+ to FAR's value

This well has been drilling for sometime and should yield a result by the 10th of January according to my calculations


In addition to this, FAR has been assessing and analysing 3D Seismic for its Sengal projects and should very shortly been announcing drill targets/leads which are estimated to be 400M bls to 1Billion Barrel + Targets, such an announcement would no doubt warrant a re-rating of FAR

I expect the stock to continue trade up in anticipation of drill results from either of the 2 programs with the wild card being the Sengal announcem,ent detailing well target sizes etc etc


Thoughts?

p.s. I'll put all my thoughts into a YT style analysis soon

 

[YOUNG_TRADER]

Re: FAR - First Australian Resources

FAR​

Mkt Structure

Shares
485m


Mkt Cap @13c = $63m Current
Mkt Cap @17c = $83m Target 1 if 1 Beibu Guld well hits oil or if Shallow South Gross Tete hits hydrocarbons
Mkt Cap @30c = $145m Target 2 when Sengal 400M bbl + targets identified
Mkt Cap @$1 = $485m Target 3 if Deep South Gross Tete hits hydrocarbons


Cash $10m + $1.3m p.a. operating cash flow = Very well funded


Production
FAR is a well funded junior oil and gas explorer with many High Impact company making projects. It utilises about $1.6m p.a. of Net Revenues to help fund its extensive exploration program



Projects

United States Projects Oil and Gas, varying 5% - 15% interests, U.S.

FAR has many US based projects with some currently in production generating about $1.6m p.a. in net revenue which assits in paying for exploration costs etc

FAR has had recent success in the US and a few of its projects are being tied into production and this will increase the net revenue figure to around say $2m p.a.

However the main interest here is the current South Gross Tete well,

The shallow target if successful would add 2-5c to FAR's SP

However it is the deeper target that is of interest, if that is successful it would add another $1+ of value to FAR's SP

The well was estimated to take 52 days to reach Target Depth and spudded on the 23rd of November which gives a rough expectation of 14 January for a result here however interim oil shows can and should be expected along the way.



Beibu Gulf Oil and Gas, 5%, Offshore China

Last year the Beibu Gulf JV discovered Oil with an estimated recoverable resource of 20M bls - 40M bls of oil, steps have been taken to commence production from this new discovery

However of great interest is the fact that FAR is participating in a follow up exploration program of 4 wells.

Success at any one of the 4 wells should add 4c to FAR's value

The first well spudded on the 1st Jan and 24hrs later was already at 560m's of a total 2,425m depth, at this rate TD should be reached by Monday the 7th ie this monday

As these exploration wells are follow ups to the discovery and based on the same high quality 3D as that of the discovery Wildcat the probability of a success here is much higher than usual.



Australian Projects Oil and Gas, 10%, Australia

The company has a few Oil and Gas projects in Australia, with its main ones being that of the Canning Basin projects

Although Valentine failed to encounter any hydrocarbons, there is still hope that Stokes may be able to produce some small commercial quantities of oil and gas,

Follow up drilling is planned in the coming months



Canadian Projects Oil and Gas, 15% - 35%, Canada

FAR has completed extensive 3D seismic over some of its Canadian prospects and now intends to market/farm them out

Marketing was scheduled to begin in December with target/lead sizes etc etc



Senegal Oil and Gas, 30%, Offshore West Africa

FAR is partnered with Hunt Oil and main present an attractive take over target depending on the size and quality of the leads it identifies, it must be remembered that this is the acerage that took Hardman from $10m to over $1.5Billion when it was taken over by Tullow Oil,

I'm sure Tullow, Hunt, Petrobras and Petronas are all watching and waiting to see what the High quality 3D seismic uncovers

The results of the survey are somewhat overdue (as with most resource projects) however I believe this holds the wild card for a rather large re-rating, as expectations are that FAR has many 400M bl + to 1Billion Barrel + targets within its acerage


Summary
- Production from the US currently running at $1.6m p.a. and set to rise
- Production from China will come online late 2008
- Many high impact wells US = up to $1 value/China = up to 15c value /Canada ? /Aust ?
- Sengal targets should cause a rerating
- Chart wise looks to have bottomed


Thoughts?

 

[doctorj]

Re: FAR - First Australian Resources

YT, I'll post my critique shortly - I'm beginning to think you're following me around.

Care to share how you've come up with your valuations?

 

[pan]

Re: FAR - First Australian Resources

thanks for the report. YT
have you brought in yet?
how come you have got MHL on the top?
thanks
pan

 

[YOUNG_TRADER]

Re: FAR - First Australian Resources

lol, hey Pan I use the formatting from previous posts, ie colour bold etc, well Prawn solved that

Hey Doc, all my valuations are based on the research reports of Peter Strachan of Stock Anaylsis and Hartleys,

There is some discrepancy between the 2 but that is becuase of the reports having the interest FAR has wrong,

See the following reports on the FAR web page

http://www.far.com.au/files/research/Hartleys Research FAR-20070226.pdf

http://www.far.com.au/files/research/StockAnalysis Issue 33 Vol 2 December 14th 2005 FAR.pdf

The important thing to remember is that these reports are outdated and oil is no longer $50 a barrel or $75 but $100 a bl, thats right $100, as such the EV valuations and profitability assumed by Strchan and Hartleys is too low,

I have access to Stock Analysis and Peter has done many updates on FAR, however as these aren't on the web page I don't want to reproduce them as people have gotten in trouble in he past for abuse of copyright etc

So I'm clear every report I provide links to or any pics attached are available on FAR's web page here

http://www.far.com.au/research/

There is also a bunch of interesting articles to read comparing FAR to Hardman early days etc


p.s. Doc great minds.........

 

[YOUNG_TRADER]

Re: FAR - First Australian Resources

Following on with what I was saying I just checked and Hartleys have on their private client web page an updated research report of FAR as at the 8th June 2007 which puts a speculative buy with a target of 32c-64c

For whatever reason the company has not put this on their web page and as such I don't want to republish it (to avoid any issues etc)

Maybe someone should call the company up and ask them to put it up there?

I notice Warick Grigor of Far East Capital is a director of FAR, I wonder if he's done any research on them as well but for whatever reason it wasn't put on the company's web page

 

[mick2006]

Re: FAR - First Australian Resources

nice piece of research there YT, there are few if any junior oil companies with the potential upside of FAR, short term you have the drilling results out of China/US which given the current oil environment will move the shareprice on any good news, but in the medium to longer term it is the Senegal leases that will be the driver.

The leases in Senegal are in oil elephant territory and as I will highlight below the value of FAR's 30% interest would already be worth around $300 million even before a drill rig touches the surface, below is a part of a recent hartley's report outlining the massive dollars international oil companies are paying for oil exploration leases in West Africa.

Unprecedented Interest in West Africa

With the major oil companies searching the globe for areas with potential for huge oil fields, under explored West Africa has captured their attention. West Africa continues to be viewed by the industry as one of the few regions outside the Middle East capable of hosting big enough hydrocarbon reservoirs to attract the major oil companies. As illustrated in Figure 1, there are a number of majors that surround FAR’s acreage including Woodside Petroleum Limited, Dana Petroleum Plc, Tullow Plc and Edison International. FAR is the only junior ASX listed company along the Mauritania-Senegal-Guinea Bissau offshore trend.

Recent activity in West Africa by some of the majors include:

• Edison completed a 1,500km² 3D seismic survey in the Rufisque Deep Offshore block to the north.
• Kuwait Foreign Exploration Co recently purchased BG Group PLC’s interests in Mauritania for $128 million.
• A recent auction of acreage in the Congo Basin, offshore Angola, for three deepwater exploration tracts saw international oil companies bid in excess of US$3.1b in signature bonuses alone. This amount is reportedly the highest ever offered for exploration anywhere in the world.
• Gaz de France has recently agreed to study the feasibility of an LNG project based on deepwater gas discoveries in nearby Mauritania.


Also of interest is the article by Resource Stocks Magazine comparing FAR progress to that of HDR at the same stage (link below, see page 2 its mind boggling how much upside FAR has due to the Senegal Leases)

http://www.far.com.au/files/research/Resourcestocks FAR 21 Mar 07.pdf


But what is almost unbelieveable is the valuations of what an actual oil discovery in Senegal would mean for FAR's share price (what YT has included in his research is the value of FAR's Senegal leases when the seismic survey results are released not if they actually discover oil)


Below are some figures from the Huntley's Research outlining the possibilities of a Senegal Oil discovery, and these are only two of the known targets.

(C1Prospect) 180-320mmbo $2.66-$4.73 per share
(N3Prospect) 120-418mmbo $2.12-$7.37 per share


The fact that oil has now hit the $100 a barrel mark, will mean any positive exploration news will send FAR flying, with results due from the first of four wells in China next week, and the results also due shortly from the high impact South Grosse Tete in the US along with the Seismic Survey results out of Senegal it will be a great time to be holding FAR.

Another interesting point is FAR is one of Fat Prophets long term oil holdings and don't be surprised once the Seismic Survey results are released from Senegal that they will re-cover the stock with a higher price target meaning more likely buyers from people that subscribe to the newsletter.

 

[doctorj]

Re: FAR - First Australian Resources

Here are some poorly organised thoughts on some of the points you made.

Senegal
For me, Senegal is the great 'hope' but I can't help suspecting about 1bbo of targets are already factored into the SP. These have already been identified by old 2d seismic. 3d seismic will help sure up drill targets - the potential upside is the chance of finding new targets. I doubt we'll see the drill bit test any of these targets for until late this year at the earliest and to do say FAR will have to either farm down to be free or near free carried or self-fund their share for a single drill and hope.

Which brings me to capital raisings. Notwithstanding Senegal which is likely to cost >$10m per drill, $1.3m/yr and $10m in the bank is not enough to self fund a reasonably active oil & gas junior looking for meaningful stakes if drills. Most of their production is from mature fields and likely to decline significantly.

I spoke to the company recently and they expect to finish processing the 3d seismic and target generation during q1.

Beibu
Beibu is excellent and the 3 or 4 well drilling program has the potential to unlock a lot of value for participants. All drilling in this program should be completed this quarter and each well should be quite quick to drill. As you say, they've been drilling and interpretting Beibu for years and the operator knows the geology quite well. Accordingly the chance of success is relatively high.

It should be noted that CNOOC has the option to farm in to the Beibu for 50%, giving FAR a potential 2.5% stake.

USA
Lake Long has been fantastic for FAR, but its worth keeping an eye on the old dog that is the Eagle Prospect. Also, FAR has a 34% stake in a large project called NE Waller. It's in a lightly explored area on trend with significant Eocene production and with target structures identified by 2d seismic in the 80's. 50km² of seismic has been shot and they're currently procesing.

The data you've used to calculate the value of the SGT shallows is out of date - FAR farmed down to a 5% interest (from memory) above 14,500ft. They've retained their interest in the larger deep target should the operator lodge a proposal to drill on.

Australia
I think Stokes Bay found something important for the whole Canning Basin and Arc, but I doubt its going to be a producer. I suspect the mud has damaged the formation and we're unlikely to see the rest of the drilling mud and hydrocarbons when they go back to have a look at the end of the wet. Perhaps a sidetrack and a better prepared mud engineer is in store in a few months?

Duomonte and Little Joe are very interesting as well and its worth keeping an eye on Apache to see if they slip it in their drilling program after the wet.

 

[Trader Paul]

Re: FAR - First Australian Resources



Hi folks,

FAR ... disregarding the fundamentals, the attached file contains some
detailed, but simple Gann astroanalysis and an updated FAR chart ...

happy days

paul



=====