FAR LIMITED — Capital/Financing Update 2018

Aug 27, 2018

28 August 2018

The Republic of The Gambia approves farm-out to PETRONAS in blocks A2 and A5

• Ministry of Petroleum and Energy, The Gambia approves assignment of 40% interest to PETRONAS in Blocks A2 and A5

• FAR retains 40% equity in Blocks A2 and A5 and Operatorship

• FAR to receive cash proceeds comprising back cost reimbursements and consideration totalling A$19M as at end June 2018

• PETRONAS and FAR plan to drill the Samo-1 well in late 2018 targeting a prospective resource of 825mmbbls*

The Government of The Republic of The Gambia in West Africa has approved the assignment by FAR Gambia Ltd of a 40% interest in petroleum licences for offshore Blocks A2 and A5 in The Gambia to a subsidiary of Petroliam Nasional Berhad (“PETRONAS”).

Under the terms of the farm-out agreement executed in February 2018, PETRONAS will fund 80% of the exploration well costs of the Samo-1 well up to a maximum total gross cost of US$45.0 million. In addition to the well costs, PETRONAS will pay FAR cash consideration of US$6 million plus 80% of nonwell back costs. The proceeds are subject to reconciliation and were estimated to be A$19 million at 30 June 2018. PETRONAS acquires a 40% working interest with FAR retaining 40% of its original 80% interest.

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FAR’s Managing Director Cath Norman said, “By securing the approval of The Gambian Ministry of Petroleum and Energy, FAR has achieved another milestone towards its objective of drilling the substantial oil resource potential of the highly prospective Blocks A2 and A5 in The Gambia.

We again thank the Gambia Ministry of Petroleum and Energy, the Gambia National Petroleum Company (GNPC), the Government of the Gambia and our broader Gambian stakeholders and look forward to working with them to drill Gambia’s first exploration well since 1979 with our coventurer, PETRONAS.”

FAR has secured a contract with a subsidiary of Stena Drilling who will provide and operate the Stena DrillMAX drillship to drill the Samo-1 well in late 2018. FAR estimates the Samo prospect contains prospective resources of 825mmbbls oil* (best estimate, recoverable, 100%, unrisked - refer ASX announcement of 21 Nov 2017 and Table 1 over page).

Figure 1: Location map for the A2 and A5 blocks offshore The Gambia and the Samo Prospect to be drilled in Q4, 2018

• Refer to Cautionary Statement in this report (page 3) relating to estimates of Prospective Resources

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Gambia prospects	Low Estimate	Best Estimate	High Estimate
	(mmbbls)*	(mmbbls)*	(mmbbls)*
	P90	P50	P10
Samo	335	825	1713
Bambo	117	333	902
Total all prospects	452	1158	2615
Total net to FAR	362	926	2092

Table 1: Prospective resources assessment of the A2 block, offshore The Gambia

FAR has identified and mapped an additional prospect (Bambo) and continues to interpret the seismic data in this highly prospective area with a view to revealing additional prospects and leads for future drilling.

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• Refer to Cautionary Statement in this report (page 3) relating to estimates of Prospective Resources

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Disclaimers

*Prospective Resource Estimates Cautionary Statement - 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. The Prospective Resource estimates provided in this report are Low Estimate, Best Estimate and High Estimate and represent that there is a 90%, 50% and 10% probability respectively that the actual resource volume will be in excess of the amounts reported.

Prospective and Contingent Resources - All contingent and Prospective Resource estimates presented in this report are prepared as at 27/2/2013, 11/3/2014, 5/2/2014, 13/04/2015, 13/4/2016, 23/08/2016, 7/2/2017 and 21/11/2017 (Reference: FAR ASX releases of the same dates). The estimates have been prepared by the Company in accordance with the definitions and guidelines set forth in the Petroleum Resources Management System, 2007 approved by the Society of Petroleum Engineer and have been prepared using probabilistic methods. The contingent resource estimates provided in this report are those quantities of petroleum to be potentially recoverable from known accumulations, but the project is not considered mature enough for commercial development due to one or more contingencies. The Prospective Resource estimates provided in this report are Best Estimates and represent that there is a 50% probability that the actual resource volume will be in excess of the amounts reported. The estimates are unrisked and have not been adjusted for both an associated chance of discovery and a chance of development. The 100% basis and net to FAR contingent and Prospective Resource estimates include Government share of production applicable under the Production Sharing Contract or Licence.

Competent Person Statement Information - The hydrocarbon resource estimates in this report have been compiled by Peter Nicholls, the FAR Limited 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 Petroleum Engineers and the Petroleum Exploration Society of Australia. Mr Nicholls consents to the inclusion of the information in this report relating to hydrocarbon Contingent and Prospective Resources in the form and context in which it appears. The Contingent and 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.

Forward looking statements - This document may include forward looking statements. Forward looking statements include, are not necessarily limited to, statements concerning FAR’s planned operation program and other statements that are not historic facts. When used in this document, the words such as “could”, “plan”, “estimate”, “expect”, “intend”, “may”, “potential”, “should” and similar expressions are forward looking statements. Although FAR Ltd believes its expectations reflected in these are reasonable, such statements involve risks and uncertainties, and no assurance can be given that actual results will be consistent with these forward looking statements. The entity confirms that it is not aware of any new information or data that materially affects the information included in this announcement and that all material assumptions and technical parameters underpinning this announcement continue to apply and have not materially changed.

• Refer to Cautionary Statement in this report (page 3) relating to estimates of Prospective Resources

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