FAR LIMITED — Capital/Financing Update 2017

Apr 5, 2017

5 April 2017

FAR announces $80 million capital raising Not for release in the United States

• Placement to institutional and sophisticated investors

• Fully underwritten by Credit Suisse and RBC

• Proceeds to fund FAR’s continued participation in the drilling, evaluation and predevelopment program offshore Senegal, the anticipated acquisition and exploration of Blocks A2 and A5 in The Gambia, and general corporate purposes

FAR Ltd (ASX: FAR) is pleased to announce a fully-underwritten placement to institutional and sophisticated investors to raise approximately $80 million before expenses by issuing 1,000 million shares (“Placement”).

The proceeds from the Placement (after costs) will be used to fund FAR’s continued participation in the drilling, evaluation and pre-development program offshore Senegal, the anticipated acquisition and exploration of Blocks A2 and A5 in The Gambia, and general corporate purposes.

The Placement price of 8.0 cents per share represents a 4.8% discount to FAR’s last close share price at 4 April 2017 of 8.4 cents and a 3.5% discount to the volume weighted average share price for the 5 trading days ended 04 April 2017.

Upon completion of the Placement, the Placement shares will represent approximately 18.3% of the enlarged share capital of the company, which will have 5,461,532,458 ordinary shares on issue. The Placement shares, when issued, will rank equally in all respects with the existing ordinary shares.

The shares will be issued in two tranches:

• The first tranche to raise approximately $54 million is unconditional and settlement is expected to occur on Monday, 10 April 2017 with normal trading to occur on Tuesday, 11 April 2017.

• The second tranche for the balance of approximately $26 million is subject to ASX Listing Rule 7.1 shareholder approval that is intended to be considered by shareholders at a General Meeting, which is expected to be held on or around Monday, 15 May 2017. Settlement of the second tranche is expected to occur on Thursday, 18 May 2017 with normal trading to occur on Friday, 19 May 2017.

Credit Suisse is acting as Financial Adviser to FAR, and the Placement is being underwritten by Credit Suisse and RBC Capital Markets as Joint Lead Managers.

The Trading Halt shall remain in place until further notice.

For more information please contact: FAR Limited Cath Norman

Cath Norman , Managing Director Gordon Ramsay, Executive General Manager, Business Development

T: +61 3 96182550 E: infor@far.com.au

Level 17, 530 Collins Street Melbourne VIC 3000 Australia www.far.com.au

This announcement has been prepared for publication in Australia and may not be released in the United States. This announcement does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or any other jurisdiction. Any securities described in this announcement have not been, and will not be, registered under the US Securities Act of 1933 and may not be offered or sold in the United States except in transactions exempt from, or not subject to, registration under the US Securities Act and applicable US state securities laws.

VR-1 well update

Following the successful appraisal of the primary target Albian sandstone reservoir in the SNE oil field offshore Senegal, the VR-1 well was deepened to a total depth of 3,899m to evaluate a secondary objective – an exploration target in the underlying Aptian carbonate.

FAR’s preliminary interpretation of the well data provided by wireline logging and sampling in the Aptian carbonate section of VR-1 has encountered indications of hydrocarbons near the base of the well. Further work is ongoing to characterise the interval. FAR’s preliminary assessment of the data indicates that the hydrocarbons are not commercially significant.

VR-1 is the 8[th] successful well drilled offshore Senegal and has confirmed the following in SNE:

• A 97m gross oil column with greater than expected net pay, and the thickest net pay of all appraisal wells drilled in the SNE oil field to date

• the best lower SNE reservoir properties measured so far in the SNE field, with a greater than expected thickness of key lower SNE reservoir units in the oil column; the 520 reservoir unit had 16m in oil, and the 540 unit had 11m in oil

• drilling is currently 10 days ahead of schedule and significantly ahead of budget

Preparations are now underway to complete operations in the hole, plug and abandon as planned and mobilise the drillship to the SNE-6 location.

FAR Managing director, Cath Norman said:

“ The results of the VR-1 well have been an overall success as the objectives of the appraisal of the SNE field at this location were met and in some cases exceeded. We see evidence at this stage of hydrocarbons in the secondary target in the limestones but at this stage, FAR’s interpretation is that these are more than likely not of economic significance although interpretation of the wireline logs and samples taken has not been completed. As previously reported, the limestone target was high risk with FAR carrying a 10% chance of success and we look forward now to completing the SNE-6 well and the connectivity measurements across the SNE field as planned.

Because of the efficient drilling in VR-1 and SNE-5 to date, the drilling program is significantly under budget which is a very pleasing achievement by the operations team.

We are also thrilled to raise $80 million at a price of 8c which has been fully underwritten by Credit Suisse and RBC. This represents a 4.8% discount to the share price on closing yesterday and a 3.5% discount to our 5-day VWAP. The modest discount offered and fact that the raise is fully underwritten is testimony to the high quality of the FAR portfolio. The cash raised is expected to fund FAR through the expected work program for 2017 and 2018 in Senegal.”

Appendix – Indicative Timetable

Event	Date
Trading Halt	Wed, 5 Apr 2017
Announcement of Placement	Wed, 5 Apr 2017
Trading halt lifted and FAR shares resume trading	Fri, 7 Apr 2017
Settlement of first tranche of Placement shares	Mon, 10 Apr 2017
Issue and quotation of first tranche of new Placement shares	Tue, 11 Apr 2017
Extraordinary general meeting (expected)	Mon, 15 May 2017
Settlement of second tranche of Placement shares (expected)	Thu, 18 May 2017
Issue and quotation of second tranche of new Placement shares(expected)	Fri, 19 May 2017

This timetable is subject to change without notice.

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Business risks

Material Business Risks

The international scope of FAR’s operations, the nature of the oil and gas industry and external economic factors mean that a range of factors may impact results. Material macro-economic risks that could impact FAR’s results and performance include oil and gas commodity prices, exchange rates and global factors effecting capital markets and the availability of financing. Material business risks that could impact FAR's performance are described below.

Technical and Operational Risks

Exploration

Oil and gas exploration is speculative by nature and therefore carries a degree of risk associated with the discovery of hydrocarbons in commercial quantities. Exploration activity may be adversely influenced by a number of different factors including, amongst other things, new subsurface geological and geophysical data, drilling results including the presence, prevalence and composition of hydrocarbons, force majeure circumstances, drilling cost overruns for unforeseen subsurface operating conditions or unplanned events or equipment difficulties, changes to resource estimates, lack of availability of suitable drill rigs, seismic vessels and other integral exploration equipment and services.

Other Operational Risks

In addition to the risks listed above FAR’s operations are potentially subject to other industry operating risks including fire, explosions, blow outs, pipe failures, abnormally pressured formations and environmental hazards such as accidental spills or leakage of petroleum liquids, gas leaks, ruptures, or discharge of toxic gases. The occurrence of any of these risks could result in substantial losses to FAR due to injury or loss of life; damage to or destruction of property, natural resources, or equipment; pollution or other environmental damage; clean up responsibilities; regulatory investigation and penalties or suspension of operations. Damages occurring to third parties as a result of such risks may also give rise to claims against FAR.

FAR manages operational risk through a variety of means including selecting suitably experienced qualified joint arrangement partners and operators, regular monitoring of the performance of operators in accordance with FAR’s policies; recruitment and retention of appropriately qualified employees and contractors, establishment and use of company-wide risk management systems. In addition, FAR implements insurance programs in place and specific insurance policies in relation to drilling operations that are consistent with good industry practice.

Joint Operation Risk

The use of joint operations are common in the oil and gas industry and usually exist through all stages of the oil and gas life cycle. Joint operation arrangements, amongst other things, mainly serve to mitigate the risk associated with exploration success and capital intensive development phases. However, failure to establish alignment between joint operation participants, poor performance of third party joint operation operators or the failure of joint operation partners to meet their commitments and share of costs and liabilities could have a material impact on FAR’s business.

FAR manages joint operation risk through careful joint operation partner selection (when applicable) stakeholder engagement and relationship management. Commercial and legal agreements are also in place across all joint operations and define the responsibilities and obligations of the joint operation parties and rights of FAR.

Government and Regulator Risk

FAR’s rights, obligations and commercial arrangements through all stages of the oil and gas lifecycle (exploration, development, production) in international oil and gas permits are commonly defined in

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agreements entered into with the relevant country’s government as well as in the country’s petroleum and tax related legislation and other laws. These agreements and laws are at risk of amendment by future governments which accordingly could materially impact on FAR’s rights and commercial arrangements adversely. Further, due to the evolving nature of exploration work programs as new technical data becomes available and due to the fluctuating availability of petroleum equipment and services, FAR may seek to negotiate variations to permit agreements in particular in relation to the duration of the exploration phase in the permit and the work program commitments.

FAR manages government and regulator risk through careful government and regulator relationship management. Failure to maintain mutually acceptable arrangements between FAR and Government and regulator could have a material impact on FAR’s business including forfeit or relinquishment of permits or commercially less advantageous terms being imposed on permits.

Sovereign Risk

FAR’s strategy is focused on exploration in Africa. Some countries within which FAR operates are developing countries that have political and regulatory structures which are maturing and have potential for further change. Uncertainty exists as to the stability of the regulatory and political environment and there is potential for events to have a material impact on the investment and security environment within the country. FAR manages sovereign risk through closely monitoring political developments and events in country.

FAR manages and amends its investment profile within a country by taking into consideration developments in the security and business environment.

Environmental Risks

Oil and gas operations have inherent risks and liabilities associated with ensuring operations are carried out in a manner that is responsible to the environment. Although FAR operates within the prevailing environmental laws and regulations, such laws and regulations are continually changing and as such, FAR could be subject to changing obligations or unanticipated environmental incidents that, as a result, could impact costs, provisions and other facets of FAR’s operations.

FAR complies with all environmental laws and regulations and, where laws and regulations do not exist, it aims to operate at the highest industry standard for environmental compliance. FAR identifies risks, threats, hazards and other environmental considerations and implements control measures to mitigate such risks. Any accidents, incidents or near misses are reported to the Board. Careful selection and engagement of contractors is undertaken to ensure adherence to FAR’s policies and appropriate contingency arrangements are put in place which include but are not limited to having insurances in place that are consistent with good industry practice; and, selection and retention of appropriately qualified personnel.

International Offer Restrictions

This document does not constitute an offer of new ordinary shares ("New Shares") of FAR in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any country outside Australia except to the extent permitted below.

Hong Kong

WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities and Futures Commission in Hong Kong pursuant to the Securities and Futures Ordinance (Cap. 571) of the Laws of Hong Kong (the "SFO"). No action has been taken in Hong Kong to authorise or register this document or to permit the distribution of this document or any documents issued in connection with it. Accordingly, the New Shares have not been and will not be offered or sold in Hong Kong other than to "professional investors" (as defined in the SFO).

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No advertisement, invitation or document relating to the New Shares has been or will be issued, or has been or will be in the possession of any person for the purpose of issue, in Hong Kong or elsewhere that is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to New Shares that are or are intended to be disposed of only to persons outside Hong Kong or only to professional investors (as defined in the SFO and any rules made under that ordinance). No person allotted New Shares may sell, or offer to sell, such securities in circumstances that amount to an offer to the public in Hong Kong within six months following the date of issue of such securities.

The contents of this document have not been reviewed by any Hong Kong regulatory authority. You are advised to exercise caution in relation to the offer. If you are in doubt about any contents of this document, you should obtain independent professional advice.

Luxembourg

The information in this document has been prepared on the basis that all offers of New Shares will be made pursuant to an exemption under the Directive 2003/71/EC ("Prospectus Directive"), as amended and implemented in Luxembourg, from the requirement to publish a prospectus for offers of securities.

An offer to the public of New Shares has not been made, and may not be made, in Luxembourg except pursuant to one of the following exemptions under the Prospectus Directive as implemented in Luxembourg:

• to any legal entity that is authorized or regulated to operate in the financial markets or whose main business is to invest in financial instruments;

• to any legal entity that satisfies two of the following three criteria: (i) balance sheet total of at least €20,000,000; (ii) annual net turnover of at least €40,000,000 and (iii) own funds of at least €2,000,000 (as shown on its last annual unconsolidated or consolidated financial statements);

• to any person or entity who has requested to be treated as a professional client in accordance with the EU Markets in Financial Instruments Directive (Directive 2004/39/EC, "MiFID"); or

• to any person or entity who is recognised as an eligible counterparty in accordance with Article 24 of the MiFID.

New Zealand

This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013 (the "FMC Act"). The New Shares are not being offered or sold in New Zealand (or allotted with a view to being offered for sale in New Zealand) other than to a person who:

• is an investment business within the meaning of clause 37 of Schedule 1 of the FMC Act;

• meets the investment activity criteria specified in clause 38 of Schedule 1 of the FMC Act;

• is large within the meaning of clause 39 of Schedule 1 of the FMC Act;

• is a government agency within the meaning of clause 40 of Schedule 1 of the FMC Act; or

• is an eligible investor within the meaning of clause 41 of Schedule 1 of the FMC Act.

Singapore

This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other document or materials in connection with the offer or sale, or invitation for subscription or purchase, of New Shares, may not be issued, circulated or distributed, nor may the New Shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore except pursuant to and in accordance with exemptions in Subdivision (4) Division 1, Part XIII of the Securities and Futures Act, Chapter 289

of Singapore (the "SFA"), or as otherwise pursuant to, and in accordance with the conditions of any other applicable provisions of the SFA.

This document has been given to you on the basis that you are (i) an existing holder of FAR’s shares, (ii) an "institutional investor" (as defined in the SFA) or (iii) a "relevant person" (as defined in section 275(2) of the SFA). In the event that you are not an investor falling within any of the categories set out above, please return this document immediately. You may not forward or circulate this document to any other person in Singapore.

Any offer is not made to you with a view to the New Shares being subsequently offered for sale to any other party. There are on-sale restrictions in Singapore that may be applicable to investors who acquire New Shares. As such, investors are advised to acquaint themselves with the SFA provisions relating to resale restrictions in Singapore and comply accordingly.

Switzerland

The New Shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange ("SIX") or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating to the New Shares may be publicly distributed or otherwise made publicly available in Switzerland. The New Shares will only be offered to regulated financial intermediaries such as banks, securities dealers, insurance institutions and fund management companies as well as institutional investors with professional treasury operations.

Neither this document nor any other offering or marketing material relating to the New Shares have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of New Shares will not be supervised by, the Swiss Financial Market Supervisory Authority (FINMA).

This document is personal to the recipient only and not for general circulation in Switzerland.

United Kingdom

Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended ("FSMA")) has been published or is intended to be published in respect of the New Shares.

This document is issued on a confidential basis to "qualified investors" (within the meaning of section 86(7) of the FSMA) in the United Kingdom, and the New Shares may not be offered or sold in the United Kingdom by means of this document, any accompanying letter or any other document, except in circumstances which do not require the publication of a prospectus pursuant to section 86(1) of the FSMA. This document should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in the United Kingdom.

Any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) received in connection with the issue or sale of the New Shares has only been communicated or caused to be communicated and will only be communicated or caused to be communicated in the United Kingdom in circumstances in which section 21(1) of the FSMA does not apply to FAR.

In the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience in matters relating to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 ("FPO"), (ii) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the FPO or (iii) to whom it may otherwise be lawfully communicated (together "relevant persons"). The investments to which this document relates are available only to, and any invitation, offer or agreement to purchase will be engaged in only

with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

United States

This document does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. The New Shares have not been, and will not be, registered under the US Securities Act of 1933 and may not be offered or sold in the United States except in transactions exempt from, or not subject to, the registration requirements of the US Securities Act and applicable US state securities laws.

Disclaimer

This announcement has been prepared by FAR Limited (‘FAR’) for publication in Australia and may not be released in the United States. It is not a prospectus, disclosure document or other offering document. It does not constitute or form part of, and should not be considered to constitute or form part of, any offer, invitation or recommendation to subscribe for or purchase any securities in FAR or as an inducement to make an offer or invitation with respect to those securities in any jurisdiction in which it would be unlawful. No agreement to subscribe for shares in FAR will be entered into on the basis of this announcement.

This announcement 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. None of FAR nor its respective officers, shareholders, related bodies corporate, partners, affiliates, employees, representatives and advisers make any reannouncement, warranty (express or implied), or assurance as to the completeness or accuracy of these forward-looking statements (or any past, current or other statements) and, accordingly, expresses no opinion or any other form of assurance regarding them. FAR will not necessarily publish updates or revisions of these forward-looking statements to reflect FAR’s circumstances after the date hereof. FAR hereby excludes all warranties, whether as to the past or the future, that can be excluded by law.

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.

This announcement has been prepared for general information purposes only and does not purport to be all inclusive or to contain all information which you may require in order to make an informed assessment of FAR’s prospects. It contains general background information about FAR and its activities current as at the date of the announcement. The information in this announcement is in summary form only and does not contain all the information necessary to fully evaluate any transaction or investment. You should conduct your own investigation, perform your own analysis, and seek your own advice from your professional adviser before making any investment decision.

The announcement does not form the basis of any contract or commitment nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment or investment decisions relating thereto, nor does it constitute a recommendation regarding the shares of FAR. Past performance cannot be relied upon as a guide to future performance.

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Cautionary Statement for Prospective Resource Estimates – With respect to the Prospective Resource estimates contained within this report, it should be noted that the estimated quantities of Petroleum that may potentially be recovered by the future application of a development project may 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.

All persons should consider seeking appropriate professional advice in reviewing the announcement and FAR.

Neither the Joint Lead Managers, nor any of their respective affiliates, related bodies corporate (as that term is defined in the Corporations Act 2001 (Cth)), nor their respective directors, employees, officers, representatives, agents, partners, consultants and advisers (together the Joint Lead Manager Parties), nor the advisers to FAR or any other person including clients named in this document, have authorised, permitted or caused the issue or lodgement, submission, dispatch or provision of this announcement and, except to the extent referred to in this announcement, none of them makes or purports to make any statement in this announcement and there is no statement in this announcement which is based on any statement by any of them.