FAR LIMITED — Interim / Quarterly Report 2012

Jan 29, 2013

1 October 2012 to 31 December 2012

==> picture [541 x 20] intentionally omitted <==

==> picture [541 x 20] intentionally omitted <==

Highlights

• Encouraging results from initial Kenya 3D seismic process data

• Well planning underway for drilling in Block L6, Kenya

• Nearing completion of Senegal prospect mapping and seismic interpretation

• Secured 3 year extension on Guinea Bissau acreage with no commitments

• Cash and term deposits at end of Quarter of $23.2 million

Projects Update

Kenya Projects - L6 Block (60% operator interest), L9 Block (30% interest)

The L6 and L9 blocks lie in the Lamu Basin offshore Kenya, north of recent, world scale, natural gas discoveries totaling around 100 trillion cubic feet off the coasts of Mozambique and Tanzania. The first well in the Lamu Basin, the Mbawa-1 well was drilled last quarter by Apache in Block L8 (located between FAR’s L6 and L9 permits). The Mbawa-1 well, which encountered 52 metres of net gas pay and had possible indications of the presence of oil, has demonstrated the existence of a working hydrocarbon system in the Lamu Basin.

Growing interest in the Lamu Basin’s exploration potential is reflected in the fact that up to 9 wells are planned to be drilled over the next 12 to 18 months. Anadarko Corporation recently spudded the first two of these wells over their Kiboko Prospect in Block 11A and the Kubwa Prospect in Block 7. Success in either of these wells will be significant for FAR as the L6 and L9 blocks neighbour these Anadarko blocks as shown in the licence map below.

==> picture [145 x 23] intentionally omitted <==

----- Start of picture text ----- FAR licences offshore Kenya----- End of picture text -----

==> picture [153 x 168] intentionally omitted <==

Block L6, Kenya (FAR 60% and Operator)

The fast track results from the 3D processed data acquired over the L6 block offshore Kenya were received in October. The results from the high quality fast track data are very encouraging and provide further technical support for the previously identified Tembo and Kifaru prospects. A final decision on a drilling target will be made after the fully processed 3D data is received which is expected in early 2013.

Well planning activities for drilling in 2013 have commenced. The tender for drilling project management services has been issued and an environmental impact assessment is well advanced.

FAR operates the L6 block and hold a 60% participating interest.

==> picture [123 x 28] intentionally omitted <==

==> picture [252 x 167] intentionally omitted <==

==> picture [252 x 23] intentionally omitted <==

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

Kenya Block L6	Paying Interest
FAR	60% Operator
Pancontinental Oil and Gas NL	40%

Block L9, Kenya (FAR 30%, Operated by Ophir Energy)

On the L9 block, negotiations are nearing completion on a Joint Operating Agreement and Deeds of Assignment. Ophir, the Operator of L9, has proposed a future work program that includes a 3D seismic survey and an exploration well.

FAR hold a 30% interest in L9.

Kenya Block L9	Paying Interest
FAR	30%
Ophir Energy	60% Operator
Avana Petroleum	10%

Page 2

==> picture [123 x 28] intentionally omitted <==

Offshore Senegal (FAR 100% and Operator)

==> picture [230 x 192] intentionally omitted <==

FAR permits offshore Senegal

During the Quarter FAR continued updating its seismic interpretation and prospect mapping on its Senegal acreage with a large number of plays and prospects now having been identified. The company expects to complete a volumetric assessment of the block’s prospect portfolio by early 2013.

During the Quarter African Petroleum confirmed its plans to drill the Alhamdulillah Prospect in 2013. This prospect extends into FAR’s Senegal acreage. African Petroleum estimated the Alhamdulillah Prospect to have 1.1 billion barrels of oil equivalent (BOE) unrisked recoverable volume.

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

Offshore Guinea Bissau (FAR 21.43%, Operated by Svenska)

During the Quarter the Government of Guinea Bissau approved a 3 year extension to the current exploration term. The extension period which begins on 26 November 2012 has no work program obligations.

During the Quarter, FAR and its Joint Venture partner Svenska approved a work program and budget which includes one appraisal well and one exploration well. FAR continues to monitor the political situation in country very closely and is planning its expenditures accordingly.

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

Page 3

==> picture [123 x 28] intentionally omitted <==

AGC Profond (FAR 10%, Operated by Ophir Energy)

During the Quarter the Joint Venture partners Ophir Energy and FAR approved a firm work program and budget incorporating a full technical evaluation of the PSC’s prospectivity. On the completion of this phase of work, the Joint Venture will then determine an appropriate work program and budget.

AGC Profond	Paying Interest
FAR	10%
Ophir Energy	90% Operator

Australia (FAR 100%, and Operator)

Work continued on reprocessing existing 2D and 3D seismic data and planning a 3D seismic survey for later in 2013.

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

China

In 2013 FAR expect to receive a US$3 million payment in relation to the sale of the Beibu Gulf assets in 2009. This will be the third and final installment of the total US$8 million sale price. This final US$3 million will be receivable on satisfaction of conditions stipulated in the sale and purchase agreement, being the production of 1 million barrels of oil from the project. Most recent information available from the Operator indicates that the conditions precedent will be satisfied during 2013.

Management comment

FAR again moves into this next quarter with a robust cash position with cash and cash equivalents of $17.4 million and long term cash deposits of $5.8 million. Plans are well underway to find a partner for drilling our Senegal and Kenyan wells. Data rooms were held in London, Houston and Melbourne during November and December 2012 and January 2013 and significant interest has been shown in the acreage. 3D seismic processed data and the ongoing mapping of prospects have provided further support for the substantial exploration potential of our Kenya and Senegal acreage.

For further information, please contact

Melbourne Office				Media Enquiries
Cath Norman				Ian Howarth
Managing Director				Collins Street Media
Phone	+61 3 9618 2550			Phone	+61 3 9223 2465
www.far.com.au
info@far.com.au

Page 4