FAR

In 2010 and 2011, I was dabbling with FAR because of its African acreage and sold out when it was unsuccessful with its initial exploration result.  Of course, I made a loss but it wasn't a disaster as I bought before it became a more speculative stock.

But in 2014, it is the most successful explorer; possibly hitting a 1-billion barrel deposit off Senegal.  It had to get joint partners as it is too expensive for a small company to explore.  More exploration wells are scheduled.

After an excellent write-up in The Australian, I purchased some FAR shares by getting rid of a failing stock and a going-nowhere stock.  Because I could sense how the stock SHOULD move, I bought it at market price as I wanted the shares.  In 3 days, it has gone up by more than 13%.  If the appraisal drilling confirms or extends the size, I would expect a rerating.  And if another hit is obtained with another drilling later this year, then this stock would be taken over...

Price of Oil

The Middle East is a quarrelsome region.  Tolerance is not an inherent characteristic even though it is predominantly just one religion.

But it is the principal oil exporting region.  Also oil is not cheap to explore for and in some areas, production is not cheap.  The incentive to use alternatives, especially renewal is stifled if the price of oil is low.  Hence, for political, financial and save-the-world reasons, the price of oil cannot be low.

However, it has been very low recently.  It has been moving up again though.  Today, it hit $60; still very low by historical measure.

I am hoping my energy stocks will have a nice rebound today.  Kerry Stokes have been investing big in mid-tier energy stocks and he has chosen well.  I hope I have to, by principally investing in KAR which has discovered decent oil in Santos Basin in offshore Brazil.  The market is totally uninterested in it in spite of all the good announcements it has been making.  Maybe these fund managers know better...