FAR LIMITED — Interim / Quarterly Report 2012

Oct 30, 2012

1 July 2011 to 30 September 2012

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Highlights

• Cash balance of $24.5M

• Completion of Kenya 3D seismic survey – fast track products underway

• Apache well proves hydrocarbons offshore Kenya

• Appointment of Ben Clube as Commercial Manager

• Withdrawal from Jamaica project

Projects update

.: Kenya :.

FAR has completed a 3D seismic survey over the L6 permit offshore Kenya. The permit lies in the Lamu Basin, north of recent, world scale, natural gas discoveries totaling around 100 trillion cubic feet off the coasts of Mozambique and Tanzania. The processing of this new survey data will be in two primary phases. A “fast tracked” product was made available to FAR mid-October with the final, fully processed products due at the end of January.

At the date of writing, the interpretation of this “fast track” data is vigorously underway and our final drilling target will be planned following this interpretation. It is FAR’s intention to release an updated prospect inventory over this area as soon as the 3D seismic data interpretation is completed. In the interim, plans are underway to prepare for drilling in 2013.

The seismic survey was completed within the approved budgeted amount and expected timeframe. The quality of data, even in the fast tracked product, is very good.

A map of the 3D seismic survey area is shown below.

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----- Start of picture text ----- FAR licences offshore Kenya Southern portion of L6 showing 3D seismic outline in red----- End of picture text -----

The L6 permit is in the Lamu Basin, offshore Kenya. FAR operates the block with 60% equity and has a 30% interest in the L9 block as shown above. The completion of the seismic survey fulfills the work program for the current period with the Kenyan Ministry of Energy.

The highly anticipated Mbawa-1 well in the adjacent Block L8 was drilled by Apache during this quarter. Anadarko Petroleum Corporation has announced plans to drill the first of its wells before year end (Blocks L7, L12, L11A, L11B) and BG is also preparing to drill its first well offshore Kenya (Blocks L10A and L10B). The well planned for Block L6 in 2013 will be FAR’s first well in Kenya.

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Limited information has been released about the Mbawa-1 well results but from the drilling campaign, we do know that the well:

1. encountered gas,

2. had 52m of net gas pay,

3. had average porosity at the reservoir level of 20%, and

4. showed evidence of fluorescence which is possibly an indication of the presence of oil (either in place or residual).

For the first well in the basin, these results are extremely encouraging and bode well for our exploration in both L6 and L9. The discovery of a working trapping mechanism offshore is important for the Lamu Basin where previously gas has been discovered onshore.

Ophir Energy operates the L9 block in which FAR has a 30% interest. The JOA and Deeds of Assignment remain in the process of being finalised.

Kenya Block L-6	Paying Interest
FAR	60% Operator
Pancontinental Oil and Gas Ltd	40%

Kenya Block L-9	Paying Interest
FAR	30%
Ophir Energy	60% Operator
Avana Limited	10%

.: Senegal :.

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----- Start of picture text ----- FAR permits offshore Senegal----- End of picture text -----

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The process of bringing a partner to drill a well with FAR in Senegal is continuing. A data room to show the updated interpretation and prospect mapping is planned in London in late November. The Company looks forward to providing updates as they become available.

FAR notes that an important well is to be drilled by African Petroleum in the Gambia on the Alhamdulilah Prospect which extends into FAR’s Senegal acreage. Drilling is anticipated to start in early 2013. This prospect adds to the inventory of prospects that FAR has in the Senegalese acreage on offer to potential partners.

Rufisque, Sangomar, Sangomar Deep	Paying Interest
FAR	100% Operator

.: Guinea Bissau :.

The permits are currently in Phase 1 of the exploration term, which has been extended for two years to 25 November 2012. A further optional four year Phase 2 exploration period has a work commitment that includes a single exploration well. There is no update to report regarding Guinea Bissau this quarter. FAR and its partner Svenska plan to finalise the extension and forward work program with the Government this quarter. We are monitoring the political situation in country very closely and carefully planning our expenditure.

Sinapa (Block 2), Esperanca (Block 4A/5A)	Paying Interest
FAR	21.43%
Svenska	78.57% Operator

.: AGC Profond :.

Both Ophir Energy and FAR agreed to move forward into the next phase of the Production Sharing Agreement with the AGC Profond. This commits the joint venture to drill one well in the next 2 years. Finalisation of the work program and timing will be agreed at the management committee meeting planned for December.

AGC Profond	Paying Interest
FAR	10%
Ophir	90% Operator

.: Australia :.

Work continues on compiling the regional data and reprocessing existing 2D and 3D seismic data ahead of planning a 3D seismic survey for early 2013.

During the quarter, FAR announced it had executed a contract for the sale of its 11.25% interest in the WA-47-R Permit to Hydra Limited. The sale value of the transaction is AU$188,727 and is subject to customary conditions and government approvals.

WA-457-P, WA-458-P	Paying Interest
FAR	100% Operator

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.: Jamaica :.

In order to maintain the focus on FAR’s African exploration assets FAR (together with its partner in Jamaica) relinquished during the quarter its five prospective, but early stage, offshore permits in Jamaica’s Walton basin. FAR held a 50% equity share.

FAR has been exploring in Jamaica for several years, acquiring new 2D seismic data and reprocessing previously acquired data. The joint venture had been seeking an extension to the exploration permit tenure and drilling commitments to attract a farm-in partner to the joint venture but could not reach agreement with the Government of Jamaica.

The permit was in good standing as the joint venture had exceeded the minimum expenditure and commitment requirements for the acreage.

Work continues on compiling the regional data and reprocessing existing 2D and 3D seismic data ahead of planning a 3D seismic survey for early 2013.

JJV Blocks 6, 7, 10, 11, 12	Paying Interest
FAR	50%
Finder Exploration Pty Ltd	50% Operator

.: China :.

FAR currently awaits a US$3 million payment due following the sale of the Beibu Gulf assets in 2009. This amount is receivable on satisfaction of conditions stipulated in the sale and purchase agreement, being the production of 1 million barrels of oil from the project. Based on the most recent information available from the Operator of the Beibu Gulf Joint Venture, the directors now expect the conditions precedent to be met.

.: USA :.

Gas sales during the quarter totaled 9.213 million cubic feet (Q3 2011: 10.279 million cubic feet) for an average of 100 thousand cubic feet per day at an average price of US$2.72 per thousand cubic feet before production taxes (Q3 2011: US$4.24/MCF). Oil sales during the quarter totaled 1,465 barrels (Q3 2011: 1,377 bbl) for an average of 16 barrels of oil per day at an average price of US$93.30 per barrel before production taxes (Q3 2011: US$92.67/bbl).

.: Management Comment :.

FAR again moves into this next quarter of market uncertainty with a strong cash position. The end of September cash position should see the Company comfortably meeting its commitments for the foreseeable future given that plans are well underway to find a partner for drilling our Senegal and Kenyan acreage.

This 3D seismic is being used to better define our prospects in the L6 block as we lead into drilling in Kenya in 2013. We look forward to providing updates as news is available.

During the quarter, the Company announced the appointment of Ben Clube as the Commercial Manager of FAR, commencing in October. Mr Clube will be initially responsible for management of joint venture operations, assist the team with business development and coordination of financial and corporate governance with the company secretary. Mr Clube will play an important role in FAR achieving its growth objectives going forward and the Company welcomes him to the team.

During the quarter, the Company made numerous presentations regarding our activities to the investment community. Please refer to our website for copies of our AGM and investor presentations.

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For further information, please contact

Melbourne Office				Media Enquiries
Cath Norman				Ian Howarth
Managing Director				Collins Street Media
Phone	+61 396182550			Phone	+61 407822319
www.far.com.au
info@far.com.au

NOTE: In accordance with Chapter 5 of the Listing Rules, the geological information in this report has been reviewed by Peter Nicholls, the FAR Exploration Manager and a professional geophysicist with over 30 years’ experience. He is a member of the American Association of Petroleum Geology and the Petroleum Exploration Society of Australia.

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