FAR LIMITED — Capital/Financing Update 2017

Mar 7, 2017

8 March 2017

Successful SNE-5 well results and forward program

• The SNE-5 well has been successfully and safely drilled, logged and flow tested with gauges set

• The well has been completed 21 days ahead of schedule and significantly below budget

• Flow rates were in line with or exceeded pre-drill expectations and a previously untested reservoir section was better than expected

  • DST 1a: 18m zone flowed at a maximum rate of approximately 4,500 bopd

  • DST 1b: 8.5m was combined with DST 1a and flowed at a maximum rate of 4,200 bopd

• Well results are consistent with the sand distribution modelling for the SNE field upper reservoirs and the ability to optimise the location and design of development wells

• Analysis and integration of the dataset collected from SNE-5 is continuing. As a consequence the joint venture will drill the VR-1 well before drilling the planned SNE-6 well

• The VR-1 well will appraise the SNE reservoirs in the western part of the field and evaluate deeper Aptian exploration targets

• The VR-1 well will be drilled at minimal additional cost to original drilling campaign budget

The SNE-5 well offshore Senegal has been successfully tested and operations have been safely completed following drilling, logging and drill-stem testing (DST) operations.

The objective of the SNE-5 well was to evaluate and flow oil from two principal units in the upper reservoirs that are within the oil leg at this location.

Oil flow rates recorded from these upper reservoir units were in line with or exceeded expectations. The S460 upper reservoir unit that was identified but not tested in previous wells flowed better than expected in SNE-5.

The SNE-5 well results show a good correlation with previous SNE wells and provide further evidence of the large extent of the SNE field, the material contribution of the upper reservoir units to the SNE oil resource volumes and the ability to produce from the upper reservoir units at commercially viable rates.

The SNE-5 results are consistent with the sand distribution models of the SNE upper reservoirs and give further confidence in the ability to optimally locate and design development wells.

Detailed analysis of the extensive dataset collected from the SNE-5 well is continuing with initial results as follows:

• Two drill stem tests (DST) were conducted within the upper reservoirs, confirming confidence in the deliverability of these units.

==> picture [596 x 84] intentionally omitted <==

• DST 1a: 18m zone in the S480 reservoir, flowed at a maximum rate 4,500 bopd, stabilized rate 2,500 bopd on 40/64” choke, and 3,000 bopd on 56/64” choke – 24 hour each test. This flow rate was better than the flow rate achieved from the same reservoir in the SNE-3 well.

• DST 1b: an additional, a previously untested S460 reservoir section of 8.5m was comingled with the 1a DST to deliver a maximum flow rate 4,200 bopd, average stabilised rate 3,900 bopd on 64/64” choke, above expectations for this interval.

• Multiple samples of oil, gas and water were collected from the well which were consistent with samples taken from all other SNE wells

• Depths to the reservoirs, depth to gas oil contact (GOC) and oil water contact (OWC) were on prognosis

• Confirmation of reservoir quality and correlation of the principal reservoir units

• Oil column thickness confirmed at 100m gross, as seen at all other SNE oil field wells to date.

Prior to SNE-5 being plugged and abandoned, pressure gauges were installed over the tested reservoir units in preparation for the planned SNE-6 well and completion of an interference test. The interference test will provide information on the connectivity of the upper reservoirs which will aid with optimising an SNE field development plan and capital expenditure for the development of the field.

Before drilling the SNE-6 well (location as per figures 1 and 2) and completing an interference test, the Stena DrillMAX drill ship will move to the VR-1 location, approximately 5 km to the west of the SNE-1 discovery. The VR-1 well will appraise the SNE lower and upper reservoirs in the western part of the field. A secondary objective of the well is to evaluate deeper Aptian carbonate exploration targets.

==> picture [267 x 216] intentionally omitted <==

==> picture [179 x 183] intentionally omitted <==

Figure 1: Location of the wells drilled to date and the planned VR-1 and SNE-6 wells

Figure 2: Cross section showing the geological setting for the SNE-5 well versus other SNE appraisal wells

==> picture [596 x 84] intentionally omitted <==

VR-1 well

The VR-1 well will appraise the lower and upper reservoir units in the western part of the SNE field. Seismic reprocessing indicates that the western part of SNE field could be more elevated than previously mapped and if confirmed, more high quality lower reservoir sands would be within the oil column. Such an outcome could significantly impact the design and scope of the first phase of development of the SNE field.

The VR-1 well will also assess the potential for additional reservoir units within the upper reservoirs in the western part of the SNE field. In addition, the VR-1 well will examine deeper Aptian carbonate exploration targets under the SNE field ( refer to Suum lead in FAR ASX announcement dated 7 February 2017 ). The VR-1 well location is shown in Figure 1 and the cross section in Figure 3 illustrates the location of the well relative to the SNE reservoirs and the deeper Aptian target.

==> picture [388 x 211] intentionally omitted <==

Figure 3: Cross section showing the geological setting for the VR-1 well versus the SNE-1 well

Budget and drilling efficiencies

Due to the efficiencies achieved on SNE-5 well and projected improved drilling performance, FAR estimates that the inclusion of the VR-1 well into the drilling program will have a minimal incremental funding impact for FAR (estimated at approximately A$2-3 million). FAR reported a closing cash position at 31 December 2016 of $47 million. FAR is comfortably able to fund this revised well program of 3 wells.

FAR Managing Director, Cath Norman, said,

“ Drilling and testing the SNE-5 well has improved our understanding of the SNE upper reservoirs, specifically the deliverability and distribution of these reservoir units across the SNE field. This understanding will be valuable in designing and efficiently locating development wells for a planned SNE field development. It was particularly pleasing to see better than expected reservoir sands in a unit not previously flow tested. This result could be of regional significance when considering the broader exploration potential of the joint venture blocks.

“The operations team and the Stena DrillMAX have performed extremely well and as a result we are

materially ahead of the JV’s original schedule and budget. This has not only resulted in considerable cost savings (that we expect to also achieve in future drilling) but it has allowed us to add the VR-1 well to the program for an incremental cost to the original budget for the SNE-5 and SNE-6 wells.

“It is critical at this time that our joint venture collect as much information as possible about the SNE field to optimise and scale the phase 1 development. By adding the VR-1 well into the drilling schedule at this time we will evaluate potential additional resource volumes that could be added into this first phase of the field development.

“Our joint venture has now drilled 7 successful wells in the basin which is a remarkable achievement.

“We look forward to updating shareholders as we progress the drilling program and analyse the results.”

==> picture [596 x 128] intentionally omitted <==