FAR LIMITED — Capital/Financing Update 2013

Mar 18, 2013

19 March 2013

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SENEGAL FARM OUT SPEARHEADS OFFSHORE WELL IN EARLY 2014

• FAR secures major UK listed company Cairn Energy PLC as partner and Operator for high impact well

• FAR fully carried through first exploration well ‐ expected early 2014

• FAR to be paid approximately US$10 million for back costs

• FAR and Cairn Energy PLC to enter into an alliance offshore Senegal

FAR Ltd (“FAR”ASX:FAR) is pleased to announce a farm in agreement for its three blocks offshore Senegal in West Africa to Cairn Energy PLC (“Cairn”), a major UK listed oil and gas company.

Pursuant to the farm in agreement, which is subject to Senegalese Government approval, Cairn will operate and carry FAR through an exploration well expected to be drilled in early 2014.

Under the terms of the farm in agreement Cairn is to acquire a 65% working interest (WI) and Operatorship by fully funding 100% of the costs of an exploration well and testing to an investment cap of US$80 million. As part of the farm in agreement, Cairn will pay FAR US$9.8 million for past costs incurred on the block. FAR will retain a 25% WI.

FAR’s three contiguous Senegalese blocks – Rufisque, Sangomar and Sangomar Deep – have significant exploration potential. The blocks cover an area of approximately 7,490km[2] within the productive Mauritania‐Senegal‐Guinea‐Bissau Basin. From 2,050 km[2] of modern 3D seismic data acquired in the blocks, FAR has identified a number of play types and has mapped 11 potentially drillable prospects as well as numerous other leads, many supported by associated seismic amplitude responses. In combination, the Senegal blocks have prospective resources of 3.585 billion barrels of oil (unrisked best estimate, 100% basis).

After the carried well, exploration costs will be apportioned Cairn 72.2% (WI 65%) and FAR 27.8% (WI 25%). Petrosen (the Senegal National Oil Company) will continue to hold a carried 10% WI through the exploration phase in accordance with the Production Sharing Contract.

In addition, FAR and Cairn will enter into an Area of Mutual Interest agreement (AMI) to work together to evaluate and consider applying jointly for exploration opportunities offshore Senegal.

FAR’s Managing Director Cath Norman said:

“We are very pleased to have secured leading independent Cairn Energy as a farm in partner and Operator in our Senegal Project. With this agreement FAR has secured a highly experienced Operator to drill and fund it through the first exploration well to be drilled off the Senegalese coast for some years.

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Success on this firs t exploratio n well woul d open up t h e significant exploratio n upside po t ential of FAR’s S e negal block s in which F A R has identi f ied and ma t ured a very large prosp e ct portfolio.

With th e Area of M utual inter e st agreed w ith Cairn, F AR is also well positi o ned to buil d on and strengt h en its existi n g acreage position in t his emergi n g explorati o n arena in West Africa where it also hol d s acreage i n neighbouring Guinea B i ssau and A G C Profond. ”

FAR in Senegal

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FAR per m its offshore S enegal
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FAR ha s been in S e negal sinc e 2008. Sen e gal is con s idered one of Africa’s most politi c ally and economically stable countries a n d hosts so m e of the b e st transpor t ation, port, telecommunications and co m municatio n infrastruc t ure in We s t Africa. It has been a functioni n g democr a cy since independence from France in 1 9 60 and enjo y s free and f air election s .

About Cairn Energy PLC

Cairn is one of Eur o pe's leadin g independent oil and g a s explorati o n and dev e lopment companies. Cairn h a s discovere d and devel o ped oil an d gas reserv e s in a varie t y of locatio n s around t h e world. The co m pany histo r ically focus e d its activi t ies in Sout h Asia whe r e it operat e d for more than 20 years. D uring this time it disco v ered, devel o ped and p r oduced oil and gas in B angladesh a nd India and ma d e more than 40 significant discove r ies. Cairn made a major oil discove r y in Rajasthan at the beginni n g of 2004 w here over 2 5 discoveries have sin c e been ma d e with the potential t o provide more t h an 30% of India’s crude oil produ c tion. Cairn ’ s business operations a re now fo c ussed in frontier exploration acreage in Morocco, S enegal, Gr e enland an d the Medit e rranean along with explora t ion and pre ‐ developme n t interests in the Nort h Sea. Cairn’ s headquart e rs are in E d inburgh, Scotlan d supported by operatio n al offices in London, Gr e enland, No r way, Spain a nd Morocc o .

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For further information, please contact

Melbourne Office Media Enquiries Cath N o rman I an Howarth Managi n g Director C ollins Street Media Phone +6 1 3 9618 2550 P hone +61 3 92 2 3 2465

www.far.com.au info@f a r.com.au

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Disclaimers

The estima t ed quantities o f petroleum that may potentially be recovered b y the application of a future dev e lopment projec t (s) relate to undiscover e d accumulations. These estima t es have both a n associated risk of discovery an d a risk of devel o pment. Furthe r exploration appraisal a n d evaluation is r equired to determine the existe n ce of a significa n t quantity of potentially moveabl e hydrocarbons.

This docu m ent may includ e forward lookin g statements. F o rward looking s t atements include, are not nece s sarily limited to , statements concerning FAR’s planned o peration program and other st a tements that are not historic fa c ts. When used i n this document, the words such as “ c ould”, “plan”, “ estimate”, “expect”, “intend”, “may”, “potent i al”, “should” a n d similar expr e ssions are for w ard looking statements. Although FAR L td believes its e x pectations reflected in these ar e reasonable, su c h statements in v olve risks and uncertainties, and no ass u rance can be gi v en that actual results will be con s istent with thes e forward lookin g statements.

Competent Person Statement

Informatio n in this report relating to hydrocarbon resour c e estimates ha s been compiled by Peter Nich o lls, the FAR Ltd exploration manager. M r Nicholls has over 30 years of e xperience in pe t roleum geophysics and geology a nd is a membe r of the America n Association of Petroleum Geology, and the Petroleum Exploration Socie t y of Australia. M r Nicholls consents to the inclus i on of the infor m ation in this report rela t ing to hydrocarbon prospective resources in th e form and con t ext in which it a ppears. The pr o spective resour c e estimates contained in this report are in accordance with the standard definitions set o u t by the Society of Petroleum E n gineers, Petrole u m Resource Management System.

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