FAR Limited Posts $1.8M Half-Year Loss After $6M Woodside Claim
FAR Limited reported a sharp turnaround to a $1.8 million loss in H1 2025, driven by a $6 million claim from Woodside Energy over its Senegal RSSD Project sale. The company continues negotiations amid volatile oil prices impacting its receivables.
- Half-year loss of US$1.82 million after prior profit of US$40.8 million
- Woodside Energy claim of US$6.03 million related to RSSD Project sale
- Provisional payment of US$11.5 million received, subject to reconciliation
- Capital return of approximately US$4.8 million completed to shareholders
- Net tangible assets per share declined from 50.75 to 43.55 cents
FAR Limited’s Financial Reversal
FAR Limited has reported a significant financial reversal for the half-year ended 30 June 2025, posting a net loss of US$1.82 million compared to a robust profit of US$40.8 million in the same period last year. This downturn primarily stems from a contentious claim by Woodside Energy, linked to the sale of FAR’s interest in the RSSD Project in Senegal.
The Woodside Claim and Its Impact
Woodside Energy has lodged a claim against FAR for US$6.03 million, following a decision by the Senegal Ministry of Energy, Petroleum and Mines that Woodside cannot recover certain petroleum expenditures not directly tied to exploration activities. This claim is part of the original sale agreement for FAR’s 13.67% stake in the RSSD Project, which includes the Sangomar Field. FAR has adjusted its consideration receivable accordingly, which has materially impacted its earnings for the period.
Consideration Receivable and Payment Dynamics
As part of the 2021 sale to Woodside, FAR was entitled to a consideration receivable capped at US$55 million, based on oil price thresholds and production volumes. In May 2025, FAR received a provisional payment of US$11.5 million for calendar year 2024, subject to reconciliation with joint venture partners and the Senegalese Ministry. The final payment amount may be adjusted following this process, which remains ongoing.
Capital Return and Cost Management
Amid these developments, FAR completed a capital return of approximately US$4.8 million to shareholders in June 2025, reflecting a strategic move to return value despite the challenging half-year results. The company also maintained a lean operating cost structure, with reduced employment and administration expenses aligning with the board’s strategy to minimise overheads during this period of uncertainty.
Outlook and Valuation Considerations
FAR values its remaining consideration receivable at approximately US$38.1 million, discounted at a risk-adjusted rate of 15%. This valuation is sensitive to future crude oil prices and production volumes, both of which are inherently volatile and outside FAR’s control. The ongoing engagement with Woodside over the claim and the reconciliation process will be critical in shaping FAR’s financial trajectory in the coming years.
Bottom Line?
FAR’s next chapters hinge on the resolution of the Woodside claim and the volatile oil market’s influence on its receivables.
Questions in the middle?
- How will the ongoing dispute with Woodside Energy be resolved, and what are the potential financial implications?
- What impact will fluctuating crude oil prices have on the valuation and timing of FAR’s remaining consideration receivables?
- Could FAR’s capital return strategy signal confidence or caution amid operational uncertainties?
