FAR LIMITED — Capital/Financing Update 2018

Mar 19, 2018

20 March 2018

Senegal resources update

• Independent Resources Report completed by RISC for FAR’s FAN oil discovery and undrilled exploration prospects, offshore Senegal

• 2C Contingent recoverable oil resource of 198mmbbls* in the FAN discovery

• Undrilled prospects in total have prospective resources of 673mmbbls oil (best estimate)*

• Joint venture intends to progress appraisal plans for the FAN South and SNE north oil discoveries

• A review of the SNE oil field is expected mid-year

FAR (ASX:FAR) has completed detailed geotechnical studies and reviewed the contingent resources attributed to the FAN discovery and prospective hydrocarbon resource potential in its Rufisque, Sangomar and Sangomar Deep (RSSD) Permits, offshore Senegal.

The RSSD blocks cover an area of approximately 7,500kms[2] and are home to the giant SNE oil field, discovered in 2014 by FAR and its partners in a two-well exploration drilling campaign offshore Senegal. The discovery of the SNE oil field and oil in the FAN-1 well (that was drilled into the deepwater FAN prospect) were the first wells to be drilled in the deepwater offshore Senegal and opened up what is now a global hotspot for oil and gas exploration.

FAR and its joint venture partners have completed the appraisal drilling over the SNE oil field in the 2016 and 2017 drilling campaigns and the field is currently progressing towards Final Investment Decision (“FID”) in 2019 following the approval of the exploitation plan by the Government of Senegal which is expected by the end of 2018.

The SNE field development will be phased and it is anticipated that nearby discoveries that are within tie-back distance of the SNE field, will be developed in later phases. The focus of the joint venture has to date been to mature a commercial development of the SNE field before finalising assessment of these tie back opportunities.

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Figure 1: Location of all wells drilled to date in FAR’s Senegal permits

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The FAN discovery well results (refer to ASX announcement dated 7 October 2014) has been evaluated by FAR and an Independent Resources Report for discovery has been completed by RISC Operations Pty Ltd (“RISC”).

The FAN discovery contingent resource estimate detailed in Table 1 below have been calculated based on FAN-1 well log interpretation and mapping using the 3D seismic and bare set out in RISC’s report and assessment of the probabilistic resource evaluation carried out by FAR in accordance with industry standard SPE-PRMS definitions. A development project is contingent on further appraisal, formulation and approval of a field development plan and financing.

Table 1. Summary of oil contingent resources (MMstb) included in RISC’s March 2018 report

		Gross		Net Attributable	Net Attributable	Net Attributable
	1C	2C	3C	1C	2C	3C
FAN Discovery (MMstb)	30	198	637	4	27	87

1. Gross are 100% of the resources attributable to the licence.

2. Net attributable are reported on the basis of FAR’s current working interest share of 15%. Petrosen has an option to increase its working interest through the exploitation phase which would reduce FAR’s working interest to 13.7%.

3. The contingent estimates are not adjusted to reflect the Production Sharing Contract entitlement on net economic interest basis.

The FAN discovery is approximately 20kms from a development hub planned at the SNE field and hence is well within tie back distance estimated to be approximately 30kms. FAR has assessed the SNE field to contain 641mmbbls oil* (96mmbbls net to FAR, see ASX anouncement dated 23 August 2016).

In the 2017 drilling campaign, FAR also drilled two new discoveries, FAN South and SNE North (as seen in Figure 1 alongside the location of the SNE Field and FAN discovery). Submissions have been made to the Government of Senegal seeking approval to undertake appraisal work programs to understand the potential commerciality of FAN South and SNE North as tie backs to the SNE Field development.

FAR has further reviewed the undrilled prospects, integrating data from the 3D seismic survey acquired in 2015, reprocessed data from the existing 3D survey and data from the 11 successful oil wells now drilled in the RSSD acreage. These prospects have been reviewed by RISC and an Independent Resources Report for these prospective resources has been provided to FAR. Table 2 below details the prospective resource inventory in the RSSD acreage as reviewed by RISC.

Table 2: Summary of RSSD Prospective Resources

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• Refer to Cautionary Statement in this report (page 4) relating to estimates of prospective resources

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FAR Managing Director Cath Norman said, “The eleven successful oil wells drilled to date in our acreage offshore Senegal are testimony to the fantastic opportunity FAR has captured and continues to mature for our shareholders. Alongside the giant SNE field, the FAN, FAN South and SNE discoveries are all within tie-back range of the planned hub development over SNE. The addition of more oil to the future phases of the development not only extends the life of the field but improves the longer-term economics of the development and revenues for the people of Senegal.

This province, and in particular our RSSD acreage, has had so few wells drilled, has rich source rocks and excellent reservoirs - so has good potential to unlock more oil when these undrilled prospects are tested in the future. Adding 198mmbbls of 2C oil resource in the FAN discovery to the 641mmbbls FAR has assessed for the SNE discovery totals an enviable 123mmbbls of 2C resources net to FAR and development of these barrels will be underpinned by FID planned in 2019”.

• Refer to Cautionary Statement in this report (page 4) 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.

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 4) relating to estimates of prospective resources Page 4