Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 0
Picked this up from another site.
Any company whose share price bolts forward 37.5% in a day's trading is bound to arouse
attention. First Australian Resources (FAR) Limited, a company with oil and gas exploration
interests in Australia and PNG and production and exploration interests in the US, has achieved
this feat. This is not unexpected when one studies recent trends. FAR's price has been steadily
increasing over the last month from 12 cents on 24 February to today's closing price of 27.5
cents, an increase of almost 230%.

Why the sudden rise?

An announcement was made on 31 January 2000 flagging FAR's intention to pursue "high tech"
and Internet opportunities. On 15 February FAR entered into a new drilling venture with American
miners Goodrich Petroleum Corporation. The program covers four prospects located in
Louisiana. Later that month FAR resolved to place 12 million ordinary fully paid shares at an
issue price of 10 cents a share, with one free option for every four shares, to raise $1.2 million.

The ASX asked for an explanation of the share price surge on 29 February, to which FAR played
a straight bat, stating that nothing had changed since the January announcement. On 9 March,
FAR reported that it would list in the US through an American Depositary Receipts ("ADR")
programme. On 14 March FAR announced a further placement, of two million shares at 16
cents, to raise $320,000.

FAR's most recent report to the ASX, which was positive but seemingly not promising enough to
explain the share-price surge, came on 16 February. Good gas shows were reported from the
Silmon et al #1 well at the South Drew Prospect in Ouachita Parish, Louisiana. Mudlog readings
increased from a background level of 25 units to 430 units of gas in a drilling break over the
interval from 9,332 to 9,374 feet.

Unsurprisingly, the ASX today requested further information from FAR. The company responded
that it was continuing to pursue the strategies outlined in the announcement made on 31
January but has no specific proposal or arrangement that is sufficiently definite to be announced.
FAR says it is unaware of any relevant information concerning the company that has not been
made available to the market.

FAR is engaged in confidential negotiations regarding "new economy" proposals. The company
says an announcement will be made as soon as something concrete comes of these
negotiations. FAR will not say whether or when this will occur.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.