FAR LIMITED — AGM Information 2022

May 30, 2022

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31 May 2022

Annual General Meeting Presentation

FAR Limited (ASX: FAR) is pleased to attach a copy of the presentation that will be made at the Company’s 2022 Annual General Meeting to be held today.

This announcement has been approved for release by the FAR Limited Board of Directors.

For further information, please contact:

Investors: Patrick O’Connor Chairman p.oconnor@far.com.au P: +61 412 026 812	Craig Sainsbury Market Eye craig.sainsbury@marketeye.com.au P: +61 428 550 499	Media: Tristan Everett Market Eye tristan.everett@marketeye.com.au
		P: +61 403 789 096

FAR Limited

Shareholder Update Annual General Meeting 31 May 2022

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2021 in review

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RSSD (Senegal) project sale agreed with Woodside for US$126m cash payment and up to US$55m in contingent payment

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Capital return to shareholders of A$0.80/share (US$57.7m)

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Restructure of Board and senior management team

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Completion of Bambo-1 well in The Gambia Block A2

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Safe operation of our assets with zero safety or environmental incidents and within its amended budget

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Unsolicited takeover offer determined to be neither fair nor reasonable

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Our Assets

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Woodside Contingent Payment

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• Entitlements are associated with the sale of FAR’s entire interest in the Senegal RSSD Project to Woodside.

• FAR received US$126 million in cash from Woodside as well as rights to the Contingent Payment as consideration for the sale.

• Potential future Contingent Payment by Woodside to FAR of up to US$55 million payable dependent on oil price and production.

• Based on current statements by the operator and current oil prices, it is likely that the full US$55 million will be received by FAR prior to the transaction long stop date in 2027 with annual payments anticipated to commence in 2024.

• The Board has determined that retaining the payments within the existing corporate structure of FAR is more tax effective than demerging them into a new entity.

• The Board will consider opportunities for the monetisation of this asset nearer the commencement of production in 2023.

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Building the case for The Gambia

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Fan-1
SNE-1
Jammah-1
Bambo-1
Samo-1
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• FAR’s investments in The Gambia have thus far failed to find potentially commercial quantities of hydrocarbons.

• Wells drilled in and adjacent to The Gambia have however filled in critical elements of the petroleum system puzzle and FAR’s Samo-1 and Bambo-1 wells in particular have provided a wealth of valuable data which may unlock future potential.

• The common trend in many basins around the world is that first entrants drill calibration wells and then leave, allowing 2[nd] or 3[rd] entrants benefit through discovery.

• FAR needs to find a smart way to protect its investment and competitive advantage.

• FAR is reviewing all of its new data and is in discussions with the joint venture partner and the government to determine how best to progress and unlock value from this asset.

• Future drilling activity will be funded through the introduction of new investors to the joint venture.

Table – Gambia Block A2 and A5 Prospective Resource volumes on an unrisked recoverable resources, 100% equity basis. The total volume for each prospect has been calculated as the arithmetic sum of the volumes for each target level. These volumes have been derived by FAR. Refer to disclaimer for further notes.

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Jammah-1

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Recent analysis found oil extracts within the well and S modern seismic suggests there is an up-dip oil and/or gas column

Regional unconformity

Tertiary carbonates are in contact with the X reservoir across the unconformity

Jammah-1 found several reservoirs overlain by R sealing shales

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In 1979 Jammah-1 found several sandstone reservoirs with overlying sealing shales but no hydrocarbons.

Subsequent analysis of rock samples by FAR in 2019 found oil shows and modern 3D seismic demonstrated that the well was drilled off the crest of the structure.

There is seismic evidence of hydrocarbons up-dip from the well but the seal is compromised because the reservoir is in contact with non-sealing Tertiary carbonates across the unconformity.

The trap is therefore probably only partially filled due to seal failure.

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Fan-1: Senegal knowledge guides The Gambia

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Regional unconformity O Significant oil column
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Evidence of mature oil prone source rocks and migration

Our experience in Senegal provides the knowledge base to explore The Gambia.

In 2014 Fan-1 found a thick oil column in Albian to Turonian sands but the reservoir was of poor quality.

There were over 1,000m of world class source rocks interbedded with the sands and the well

demonstrated that the shales are capable of generating significant quantities of oil.

Is the oil charge capable of reaching the sandstone reservoirs on the shelf present in Jammah-1?

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SNE-1: Senegal knowledge guides The Gambia

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In 2014 SNE-1 tested a structural high beneath the regional unconformity and encountered a thick oil column in good quality reservoirs.

This is proof that oil has migrated from the source area to the west. There is a good top seal immediately above the reservoir and Maastrichtian shales across the unconformity provide a lateral seal.

Where to go next to try and replicate this success?

Evidence of mature oil prone source rocks and Regional unconformity migration

O Significant oil column

Reservoirs with overlying sealing shales R

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Samo 1

After the success of SNE-1 in Senegal, FAR’s attention shifted to The Gambia with the objective of exploring the same geological trend.

The Samo structure was an opportunity to test an analogous structure at the same stratigraphic level and was an obvious choice.

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Samo-1

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Evidence of mature oil prone source rocks and Regional unconformity migration Oil shows and/or oil extracts from cuttings Reservoirs S R

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Samo-1 had oil shows at several levels confirming that the working petroleum system extends to the south.

The top seal that was present in SNE-1 was not present in Samo-1 which is the most plausible reason for failure.

The deeper shows and oil extracts suggest there may also be a contribution from a source kitchen to the east.

The shows beneath the unconformity suggest that migration continues upwards and further east where the reservoir seal pair up-dip from the well, previously identified in Jammah-1, is now the Panthera prospect.

If the Panthera prospect is filled to spill it may provide an additional migration pathway into the accumulation up dip from Jammah-1 inferred from seismic.

Anticipated seal above the primary reservoir X was not present

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Bambo-1

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The Bambo-1 well was designed to test the southern extent of the SNE-1 structure which extends into Gambian waters.

There were other objectives but because the well had to penetrate the SNE structure (Soloo prospect) above the oil water contact, the location with respect to the secondary objectives, was not optimal.

The well was located at the very edge of the Panthera prospect closure.

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Bambo-1

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Evidence of mature oil prone source rocks and migration

Regional unconformity

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Reservoirs
R
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S Oil shows and/or oil extracts from cuttings

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The seal missing in Samo-1 was present in Bambo-1.

There appears to be an oil column in the Lower Albian primary target which is equivalent to the SNE-1 oil column but there was no reservoirs in Bambo-1.

Once again the deeper shows suggest the presence of an eastern oil kitchen and the shallow shows beneath the unconformity have the appearance of a transition zone adjacent to an oil column.

The Bambo-1 well may have provided critical evidence to de-risk the Panthera prospect.

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R No viable reservoir facies
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What Next?

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The wells drilled to date have demonstrated the presence of several oil prone source rocks which can charge structures from the west and from the east.

There are reservoirs, seals and viable traps.

The challenge as always is to find these in the combination that works.

FAR is developing a work programme designed to best utilise all of the new data to better define exploration risk and to select the best possible drilling location.

The Panthera prospect with critical supporting evidence provided by Jammah-1, Samo-1 and Bambo-1 is currently the highest ranked prospect across the portfolio.

FAR is reviewing all of the new data and holding discussions with its joint venture partner and the government to determine how best to progress with exploration efforts.

Future drilling activity will be funded through the introduction of new investors to the joint venture.

Panthera Top Albian Seal Depth Structure Map

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Our Strategy

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Our strategy for 2022

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Determine how best to realise full value from our investment in The Gambia

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Explore a broad range of new business opportunities

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Minimise overheads and preserve capital

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Capital management strategies to ensure our share price better reflects underlying asset value

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Maintain focus on governance and ESG

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The Gambia Strategy

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Determine how best to realise full value from our investments in The Gambia

• Each of the wells drilled in The Gambia have provided valuable information, improving our understanding of the petroleum system which de-risks future exploration efforts.

• The Board’s strategy for 2022 is to ensure that shareholders can capitalise on the valuable data acquired to date, without drawing down on existing capital.

• Subject to concluding discussions with our joint venture partner and government on the optimal path forward prior to the permit expiry in September 2022, the Company will seek to secure a transaction with a suitably qualified party to ensure that this strategy can be enacted.

• Depending on the nature of any transaction that might be secured, the Board will consider the separation of the oil and gas assets by way of a demerger into a separate stand-alone listed entity.

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New Business Strategy

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Explore a broad range of new business opportunities

• While committed to exploring options to progress with our projects in The Gambia, maintenance of the status quo is not an option being considered by the Board.

• The Company is reviewing a pipeline of new oil and gas opportunities in its historical exploration heartland of Africa and beyond.

• While oil and gas will continue to underpin the global economy for the foreseeable future, the dramatic acceleration of pace of in the Energy Transition sector is creating new and exciting ways of investing in the energy business.

• The Board is considering new business initiatives in both oil and gas and across the Energy Transition sector.

• Any significant new business initiatives must have the potential to offer significantly better returns to shareholders than share buy-backs or capital returns.

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Overheads and Capital Management Strategy

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Minimise overheads and preserve capital

• FAR has budgeted to spend US$6.8 million during the year ending 31 December 2022 on The Gambia licenses, marketing, corporate and administration costs.

• There is new focus on financial discipline and the right sizing of corporate structure and expenses to reflect the operating structure and outlook.

• Various cost saving measures have been introduced and further measures will be implemented throughout the year.

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Capital management strategies to ensure our share price better reflects underlying asset value

• The Board is acutely aware of the value of the available cash balance and the anticipated conditional US$55 million payment from Woodside and how these are reflected in the current share price.

• Depending on the outcomes of our work in The Gambia and the evaluation of new business opportunities, the Board will continue to consider appropriate capital management strategies to ensure the share price better reflects the value of our underlying assets.

• On 30 May 2022, we have announced a buy back programme for unmarketable share parcels using existing cash reserves. It is anticipated that the buyback will utilise A$0.85m of our available cash reserves.

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Environmental, Social and Governance

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Maintain focus on governance and ESG

• FAR is committed to managing its environmental, social and governance (ESG) responsibilities and to embedding ESG into FAR’s philosophy, practices and business processes.

• FAR recognises its responsibility to support greenhouse gas emissions reduction initiatives where it

• can.

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• Some of our recent ESG initiatives and success include:

• The Bambo drilling campaign was completed with zero Lost Time Injuries.

• COVID-19 management plan meant no delays were experienced on the rig.

• Working towards making Bambo a carbon neutral drilling campaign.

• Upgrade of the Ndemban Covid Clinic in Banjul.

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Looking forward in FAR

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The Gambia

• Utilise the data and our knowledge The Gambian assets to unlock value.

• Continue discussion with JV Partner and Government on path forward before Permit extension in September 2022.

• Progressing a farm down and in doing so seek a carry of an exploration well or an outright sale.

• In the absence of The Gambia exploration assets being sold in their entirety, seek the separation of them by way of a demerger into a separate stand-alone listed entity.

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New Business Opportunities
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Evaluation new opportunities that offer significant potential for improved share price and returns to shareholders.
•
Considering new business initiatives in oil and gas and across the Energy Transition sector.
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Financial and Capital discipline

• Further reduce corporate overheads.

• Consider capital management alternatives to maximise shareholder value.

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Our Company

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31-May-21 30-Jun-21 31-Jul-21 31-Aug-21 30-Sep-21 31-Oct-21 30-Nov-21 31-Dec-21 31-Jan-22 28-Feb-22 31-Mar-22 30-Apr-22 27-May-22
Share Price (A$/sh)
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	ASX Ticker	FAR
	Share price1	A$0.78
	Cash2	US$39.9M
	Debt	Nil
	Issued shares	99.8M
	Market capitalisation1	A$78M

	Substantial shareholders
	Meridian	19.3%
	FARJOY	5.2%

Chairman	Patrick O’Connor
Director	Alan Stein
Director	Robert Kaye

1. As at close of trading 27 May 2022

2 As at 31 March 2022

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Disclaimer

• This presentation has been prepared by FAR Limited (‘FAR’). It should not be considered as an offer or invitation to subscribe for or purchase any shares in FAR or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for shares in FAR will be entered into on the basis of this presentation.

• This presentation contains forward-looking statements that are not based on historical fact, including those identified by the use of forward-looking terminology containing such words as ‘believes’, ‘may’, ‘will’, ‘estimates’, ‘continue’, ‘anticipates’, ‘intends’, ‘expects’, ‘should’, ‘schedule’, ‘program’, ‘potential’ or the negatives thereof and words of similar import.

• FAR cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual events or results to differ materially from those expressed or implied by the statements. The forward looking statements are expressly subject to this caution. FAR makes no representation, warranty (express or implied), or assurance as to the completeness or accuracy of these forward-looking statements and, accordingly, expresses no opinion or any other form of assurance regarding them. FAR will not necessarily publish updates or revisions of these forwardlooking statements to reflect FAR’s circumstances after the date hereof.

• By its very nature exploration and development of oil and gas is high risk and is not suitable for certain investors. FAR shares are a speculative investment. There are a number of risks, both specific to FAR and of a general nature which may affect the future operating and financial performance of FAR and the value of an investment in FAR including and not limited to economic conditions, stock market fluctuations, oil and gas demand and price movements, regional infrastructure constraints, securing drilling rigs, timing of approvals from relevant authorities, regulatory risks, operational risks, reliance on key personnel, foreign currency fluctuations, and regional geopolitical risks.

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• This presentation does not purport to be all inclusive or to contain all information which you may require in order to make an informed assessment of the Company’s prospects. You should conduct your own investigation, perform your own analysis, and seek your own advice from your professional adviser before making any investment decision.

• Cautionary Statement for Prospective Resource Estimates – The Prospective Resource estimates provided in this report are the estimated quantities of Petroleum that may potentially be recovered by the future application of a development project, and relate to undiscovered accumulations. These estimates have an associated risk of discovery and risk of development. Further exploration and appraisal is required to determine the existence of a significant quantity of potentially moveable hydrocarbons.

• Information in this report relating to hydrocarbon resource estimates has been compiled by Peter Nicholls, the FAR exploration manager. Mr Nicholls has over 30 years of experience in petroleum geophysics and geology and is a member of the American Association of Petroleum Geology, the Society of Exploration Geophysicists and the Petroleum Exploration Society of Australia. Mr Nicholls consents to the inclusion of the information in this report relating to hydrocarbon Prospective Resources in the form and context in which it appears. The Prospective Resource estimates contained in this report are in accordance with the standard definitions set out by the Society of Petroleum Engineers, Petroleum Resource Management System.

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For further information, please contact:

Investors: Media: Patrick O’Connor Craig Sainsbury Tristan Everett Chairman Market Eye Market Eye p.oconnor@far.com.au craig.sainsbury@marketeye.com.au tristan.everett@marketeye.com.au P: +61 412 026 812 P: +61 428 550 499 P: +61 403 789 096

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