FAR LIMITED — Interim / Quarterly Report 2012

Apr 29, 2012

Quarterly report for the period 1 January 2012 to 31 March 2012

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Highlights

• $15M raised through placement of shares and Share Purchase Plan

• US$3M from sale of Beibu Gulf assets received

• Cash balance of $35.8M as at 30 April 2012

• Sign off for Kenya 3D seismic survey

• Presidential Decree confirms Senegal renewal

• Retirement of Chairman, Michael Evans

Projects update

Kenya

FAR has awarded a 3D seismic survey over the L6 permit offshore Kenya to Fugro Geoteam. 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.

A map of the planned 3D seismic survey 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 survey will cover 680km[2] and is budgeted to cost $13.67M (FAR Ltd share $8.2M). The seismic survey is expected to start at the end of May and take approximately 5 weeks to acquire.

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 next well to be drilled in the basin will be the Mbawa prospect in Block L8 by Apache Corporation in August this year.

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Anadarko Petroleum Corporation has announced plans to drill the first of its wells before year end (Blocks L5, L7, L12, L11A, L11B) and BG is preparing to drill its first well offshore Kenya at the end of 2012 (Blocks L10A and L10B). FAR will drill its first well on Block L6 in mid 2013.

Ophir Energy operates the L-9 Joint Venture in which FAR has a 30% interest. The JOA and Deeds of Assignment remain in the process of being finalised.

Deeds of Assignment remain in	the process of being finalise
Kenya Block L-6	Interest
FAR	60% Operator
Pancontinental Oil and Gas Ltd	40%

Kenya Block L-9	Interest
FAR	30%
Ophir Energy	70% Operator
Camac Energy	10%

Senegal

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FAR permits offshore Senegal

FAR received the Presidential Decree on 6 February 2012 confirming FAR’s entry into the second renewal period under the Production Sharing Contract (PSC).

The PSC terms require a well to be drilled within two years of entering the second renewal period backed by a surety of US$5 million that is forfeitable in the event of non-performance. FAR is currently seeking cost recovery and a free carry through the drilling of this exploration well and the farmout process has been rejuvenated with the issue of the Presidential Decree.

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2012 is shaping up to be a landmark year for deepwater exploration generally along the Central Atlantic Margin with wells earmarked for drilling by Anadarko (Sierra Leone/Liberia), Hyperdynamics (Guinea), African Petroleum (Liberia and Gambia) and Chevron (Liberia).

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 their partner Svenska are planning for a partner meeting in June and are watching the political situation in country very closely. We are not expecting the reported coup to impact the business in the near future.

impact the business in the near future.
Sinapa (Block 2), Eperanca (Blocks 4A/5A)	Paying Interest
FAR	21.43%
Svenska	78.57% Operator

AGC Profond

Work continues to evaluate leads in the block in readiness for entering a new exploration period in September 2012.

period in September 2012.
AGC Profond	Paying interest
FAR	10%
Ophir Energy	50.23%Operator
Noble Energy	34.09%
Rocksource	5.68%

Australia

Work continues on compiling the regional data and reprocessing existing 2D and 3D seismic

data ahead of planning a 3D seismic survey in blocks WA-457-P and WA-458-P for early

2013.
WA-457-P, WA-458-P	Interest
FAR	100%

During the quarter, the operator of WA-254-P advised that the Joint Venture had been awarded the WA47-R Retention Lease over the Sage-1 oil discovery.

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Jamaica

FAR’s Jamaican project is located in the Walton Basin, Jamaica, and is owned by the Jamaica Joint Venture (JJV). FAR is a 50% equity partner in the JJV, with the operator being Finder Exploration Pty Ltd. The JJV continues to seek a partner for the drilling of a well offshore Jamaica.

offshore Jamaica.
JJV Blocks 6, 7, 10, 11, 12	Interest
FAR	50%
Finder Exploration Pty Ltd	50% (Operator)

China

During the quarter, FAR received the US$3M second tranche payment from the 2009 sale of its Beibu Gulf assets, offshore China. A third and final tranche of US$3M is payable to FAR on the project producing 1million barrels of oil.

USA

Gas sales during the quarter totalled 9.2 million cubic feet (Q4 2011: 10 million cubic feet) for an average of 100 thousand cubic feet per day at an average price of US$2.81 per thousand cubic feet before production taxes (Q4 2011: US$3.62/MCF). Oil sales during the quarter totalled 1,157 barrels (Q4 2011: 1,349bbl) for an average of 12.8 barrels of oil per day at an average price of US$101.95 per barrel before production taxes (Q4 2011: US$98.57/bbl).

Management comment

On 29 March, FAR announced that it was raising $15M through a placement of 280 million shares at 4.3 cents per share and a Share Purchase Plan of up to $3M to shareholders. The company had $22.2M of cash at the end of the quarter and, at the current date, has $35.8M in cash reserves following the receipt of funds from the placement and Share Purchase Plan.

In March, US$3M was received from the sale of the Beibu Gulf project and in the same month, $2.9M was used to repay a convertible note. The company is now debt free.

FAR moves into the next quarter with a very strong cash position. Payment for the Kenya L6 seismic survey ($8.2M) will be made this coming quarter. This 3D seismic will be used to better define our prospects in the L6 block as we lead into drilling in Kenya in mid 2013. August will see the first exploration well being drilled by Apache in the Lamu Basin and 3D with Anadarko and BG also preparing to drill in the basin. We look forward to providing updates as news is available.

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During the quarter, a series of presentations were made to stakeholders showing the expanded FAR following the takeover of Flow Energy and plans for FAR into the future. Please refer to our website for copies of our investor presentation.

During the quarter, Michael Evans, the Executive Chairman of FAR for the last 20 years, announced his retirement from the company. Under Michael’s leadership the company successfully entered West Africa and built an extensive acreage position in the region. He also oversaw the merger with Flow Energy adding the East African projects to the FAR portfolio. The board and staff of FAR thank Michael wholeheartedly for his years of service to the company and wish him every happiness in retirement.

Nic Limb has been appointed non-executive Chairman.

For further information, please contact

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----- Start of picture text ----- Melbourne Office Media EnquiriesCath Norman Ian HowarthManaging Director Collins Street MediaPhone +61 396182550 Phonewww.far.com.auinfo@far.com.au----- End of picture text -----

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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