FAR LIMITED — Capital/Financing Update 2019

Dec 11, 2019

NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION OR RELEASE IN THE UNITED STATES

12 December 2019

Equity raising to complete FAR’s funding plan for development capex to first oil

• FAR has completed a A$146 million conditional placement to institutional and sophisticated investors

• Proceeds form part of the overall financing package to fund FAR’s capex to first oil for the Sangomar Oil Field development

• SPP to existing eligible shareholders to raise up to a further A$30 million

FAR Limited (ASX:FAR) today announces a conditional placement to raise A$146 million at A$0.0425 per share (Placement). In addition, FAR will conduct a share purchase plan to existing eligible shareholders to raise up to a further A$30 million at the same price as the Placement (SPP), together, the Equity Raising.

The proceeds from the Placement form part of the planned financing package to fund FAR’s capex to first oil for the Sangomar Oil Field development, offshore Senegal, working capital and transaction costs.

The Placement price of A$0.0425 per share represents a 21.3% discount to FAR’s last closing price on Monday, 9 December 2019 of A$0.054 per share and a 12.0% discount to the 5-day VWAP.

The shares issued under the Placement are conditional upon gaining shareholder approval at a General Meeting to be held on or around 16 January 2020 and on the receipt of a credit approved Term Sheet for an underwritten US$350 million senior debt facility by 31 December 2019.

New shares issued under the Placement will represent approximately 35.4% of the enlarged share capital of FAR, which will have 9,715,681,158 ordinary shares on issue. New shares issued via the Placement and SPP will rank equally in all respects with existing ordinary shares.

Further information in relation to the Equity Raising is set out in the Investor Presentation released by FAR to ASX on Thursday, 12 December 2019. The Investor Presentation contains important information including key risks and foreign selling restrictions with respect to the Equity Raising.

Use of funds

FAR intends to use proceeds from the Placement and SPP for the following purposes:

• To fund development capex to first oil – along with FAR’s existing cash reserves, a US$350 million senior debt facility (refer ASX announcement 14 November 2019) , and a junior debt facility of up to US$150 million, proceeds from the Placement will be used to fund FAR’s share of capex to first oil of US$492 million (which includes a 10% contingency);

• To fund the transaction costs associated with the Placement; and

• To strengthen the balance sheet and support associated working capital, including capex post first oil.

Bell Potter Securities Limited is acting as the Sole Lead Manager and bookrunner to the Placement.

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Update on Overall Funding Strategy

As reported to the ASX on the 14[th] of November 2019, FAR is pleased with the level of interest from both Australian and International Banks to participate in the syndicate for senior debt.

In addition, FAR is also pleased to have received interest in providing junior debt (mezzanine finance) to further augment FAR’s funding options.

FAR is targeting binding and committed terms for the senior debt upon completion of each banks credit approval process on or before the end of 2019.

FAR expects to make further announcements as the financing progresses.

Indicative timetable

Event	Date¹
Trading halt	Tuesday, 10 December 2019
Placement opens	Tuesday, 10 December 2019
Placement closes	Wednesday, 11 December 2019
Trading halt lifted and shares commence trading on ASX	Thursday, 12 December 2019
SPP opens	Monday, 16 December 2019
SPP closes	Tuesday, 14 January 2020
FAR General Meeting to approve the Placement2,3	Thursday, 16 January 2020
Settlement of New Shares to be issued under the Placement	Friday, 17 January 2020
Allotment date and normal trading of New Shares issued underthe Placement and SPP	Monday, 20 January 2020

1 The above timetable is indicative and subject to variation. FAR and the Lead Manager reserve the right to withdraw or amend the Equity Raising or alter the timetable at their absolute discretion and without notice, subject to ASX Listing Rules, the Corporations Act and other applicable law. All dates and times refer to Melbourne, Australia time.

2 The Placement is subject to a shareholder vote to be held at a General Meeting, currently expected to take place on or around Thursday, 16 January 2020.

3 The Placement is conditional on FAR agreeing binding term sheets for the senior debt facility before 31 December 2019.

This ASX announcement was approved and authorised for release by FAR’s Disclosure Committee.

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