FAR LIMITED — Interim / Quarterly Report 2014

Apr 29, 2014

Q1 Report

Highlights

• Drilling underway offshore Senegal

• 2013 Annual report released

• Significant hydrocarbon resources assessed in FAR’s offshore WA and Guinea-Bissau permits*

• US$5M cash received for Senegal farm-out deal

• Farm out for a $30M seismic and drilling program onshore Kenya Block L6 completed and approved by Kenyan Government

• Strong cash position of $27.15 million with no debt

Projects update

Offshore Senegal (FAR 15% – post farm-out)

During the quarter FAR announced the receipt of US$5 million from Cairn Energy (UK) (“Cairn”). This payment was the final cash payment from Cairn following the farm-in to the offshore Senegal project.

On April 17 FAR announced commencement of drilling on the FAN-1 well offshore Senegal in partnership with Cairn (operator) and ConocoPhillips.

Under the terms of the ConocoPhillips agreement, ConocoPhillips will provide funding equivalent to a full carry of FAR through the first exploration well in exchange for a 10% working interest in the Senegalese permits. This funding will take the form of cash payments and well carry cost payments. Cairn will fund 100% of FAR’s costs of the second exploration well offshore Senegal to an investment cap of US$80 million. In addition, Cairn has paid FAR US$9.82 million for past costs.

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

FAR retains a 15% working interest in the permits. ConocoPhillips and Cairn will hold 35% and 40% respectively. Petrosen, the Senegal National Oil Company, has a 10% carried interest through this exploration phase.

• Refer to cautionary statement in relation to prospective resources on page 6

Q1 Quarterly Report

The two back-to-back exploration wells, the first of which commenced drilling in Q1 2014, will target approximately 1.5 billion barrels (225 million net to FAR)* of unrisked best estimate prospective resources. With approximately 900 million barrels (135 million net to FAR)* to be tested in the deep water FAN-1 well and 600 million barrels (90 million net to FAR)* to be tested in the SNE-1 well (reference: ASX release 27/02/2013).

Both prospects have significant follow-up drilling potential in the event of a discovery. FAR’s three contiguous Senegalese blocks – Rufisque, Sangomar and Sangomar Deep – cover 7,490km[2] . From 2,050km[2] of modern 3D seismic data acquired in the blocks, FAR mapped 11 potentially drillable prospects as well as numerous other leads, many supported by associated seismic amplitude responses in plays including the ‘fan’ and ‘shelf’. FAR has assessed its Senegal blocks to have prospective resources of 3.585 billion barrels of oil (538 million net to FAR)* (reference: ASX release 27/02/2013) .

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----- Start of picture text ----- SENEGAL----- End of picture text -----

Figures 1 and 2: Location of the two Senegalese wells in the FAR 3D seismic area, offshore Senegal

Rufisque, Sangomar, Sangomar Deep	Working Interest
FAR	15%
Cairn Energy	40% Operator
ConocoPhillips	35%
Petrosen	10%

• Refer to cautionary statement in relation to prospective resources on page 6

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Q1 Quarterly Report

Block L6, Kenya (FAR 60% offshore, 24% onshore and Operator)

A third farm-out to the Milio group of companies was completed and approved by the Kenyan Government during the quarter (reference: FAR ASX release 04/02/2014) . As a result, FAR is fully carried through an onshore well and onshore seismic program due to commence in June 2014. The well is expected to be drilled early 2015 once a final drilling location is selected from the new seismic data. This carried program applies to the onshore portion of Block L6, Kenya where there is strong potential for discovery of gas and a near term gas to power development opportunity.

FAR retains a 24% interest in the onshore part of the Block L6. In the offshore portion of Block L6 where FAR currently has a 60% interest, FAR is currently progressing a farm out initiative for drilling an offshore well. The recent Sunbird-1 discovery well drilled by the BG Group in the nearby Kenya Block 10A targeted a Miocene reef structure. The Miocene reef play extends along the coast of Kenya and through both of FAR’s offshore blocks, L6 and L9. With the very encouraging Sunbird-1 well results, FAR anticipates strong industry interest in its L6 farm-out opportunity.

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----- Start of picture text ----- FAR permits Kenya----- End of picture text -----

Kenya Block L6	Paying Interest Onshore	Paying Interest Offshore
FAR	24% Operator	60% Operator
Pancontinental Oil and Gas	16%	40%
Milio Group	60%

Block L9, Kenya (FAR 30%)

Subject to receipt of unconditional Government approval for the Joint Venture agreements, FAR expects to pay Ophir approximately US$11 million relating substantially to back costs on seismic surveys. FAR expects to also provide funding for a bank guarantee in favour of the Government of Kenya in relation to the Block L9 work commitment.

The Operator plans to drill the first exploration well on Block L9 at the end of 2014. FAR intends to farm-out part of its interest for drilling and has already received unsolicited expressions of interest.

FAR hold a 30% interest in L9.

Kenya Block L9	Paying Interest
FAR	30%
Ophir Energy	70% Operator

• Refer to cautionary statement in relation to prospective resources on page 6

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Q1 Quarterly Report

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

In December 2012, the Government of Guinea-Bissau approved a 3 year extension to the current exploration term. The extension period began on 26 November 2012 and has no work program obligations.

FAR and its Joint Venture partner Svenska Petroleum Exploration AB has approved a work program and budget which includes one firm appraisal well and one contingent exploration well. In response to the ongoing elections in Guinea Bissau, the Joint Venture has postponed plans to drill the first well until March 2015 and a revised budget and work program for the 2014 period is being compiled

The Sinapa appraisal well will be drilled into the Sinapa Oil field discovered by Premier in 2004. If this well is a commercial success then a further exploration well will be drilled. FAR has a 21.43% paying interest and 15% working interest in the Sinapa and Esperanca blocks offshore Guinea-Bissau. During the quarter FAR completed an internal assessment of the contingent and prospective resources in its Guinea-Bissau blocks ( reference: ASX release 05/02/2014 )*.

FAR continues to monitor the political situation in Guinea-Bissau very closely and is in discussions with the Operator on the Joint Venture’s future plans and expenditures in light of potential developments in country. Democratic elections have been scheduled to conclude during May 2014. The international community has committed to supporting the electoral process and nation building initiatives afterwards.

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

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

During the quarter the Joint Venture partners Ophir Energy and FAR continued a technical evaluation of the prospectivity in the AGC Profond acreage. On the completion of this phase of work, the Joint Venture will determine an appropriate way forward for the permit. Discussions have started with the Regulator on possible options for the permit. The current PSC period ends in September 2014. FAR has an 8.8% beneficial interest in the permit.

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

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----- Start of picture text ----- FAR permits Guinea-Bissau and AGC Profond----- End of picture text -----

Australia (FAR 100%, and Operator)

Work continued on reprocessing existing 2D and 3D seismic data and planning a 3D seismic survey for later in 2014 and a farm-out of the forward work program was initiated during the period.

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

• Refer to cautionary statement in relation to prospective resources on page 6

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Q1 Quarterly Report

Management comment

FAR has concluded two major farm-out agreements on its acreage in Senegal. In accordance with the terms of the farm out deals completed with Capricorn Senegal Limited (a wholly owned subsidiary of Cairn) and ConocoPhillips, FAR has successfully secured its share of funding for two exploration wells. Based on current well cost estimates, the carry funding and cash payments that FAR has or will receive under the farm out agreements are expected to be in excess of FAR’s share of the combined well costs for the two wells. Drilling has commenced on the first of these wells, the FAN-1 well in the deepwater offshore, and will be followed by a shelf edge well (SNE-1).

A third farm-out to the Milio group of companies was completed for the onshore portion of the Kenya Block L6. A farm-out initiative is progressing to secure funding for the drilling of an offshore well on our Block L6. With a two year extension on Block L6 secured, FAR can readily manage the drilling timetable and reduced near term forecast cash outflows that will enable the company to leverage the results of surrounding wells including BG Group’s Sunbird-1 well in Block L10A on the carbonate reef play.

FAR has confirmed its entry into the highly prospective Block L9 offshore Kenya and is awaiting Government approval of its interest in the block.

FAR plans to complete a seismic survey in 2014 to evaluate its WA-457-P and WA-458-P permits on the North West Shelf offshore Western Australia.

FAR continues into this next quarter with a strong cash position of AU$27.15 million.

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• Refer to cautionary statement in relation to prospective resources on page 6

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Q1 Quarterly Report

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 .

Prospective Resources - Prospective resource estimates presented in this report are prepared as at 27 February 2013 (Reference: FAR ASX release of 27/02/2013), 4 February 2014 (Reference: FAR ASX release 05/02/2014) and 11 March 2014 (Reference: FAR ASX release 11/03/2014) . 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. Unless otherwise stated the 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 prospective resource estimates include Government share of production applicable under the Production Sharing Contract .

Competent Person Statement Information - In this report relating to hydrocarbon resource estimates has 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 Prospective Resources in the form and context in which it appears. The 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 relation to prospective resources on page 6

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Q1 Quarterly Report

Permit Table

Project and Location	Tenement	Beneficial Interest	Acquired during	Disposed duringthe quarter
		at end of quarter	the quarter
AGC Profond (offshoreblock in maritime areajointly administered bySenegal and GuineaBissau)	AGC Profond	8.80%	N/A	N/A
Guinea-Bissau (offshore)	Sinapa Block 2	15.00%	N/A	N/A
	Esperanca Blocks 4A	15.00%	N/A	N/A
	& 5A
Senegal (offshore)	Rufisque,	15.00%	N/A	10.00%1
	Sangomar	15.00%	N/A	10.00%1
	Sangomar Deep	15.00%	N/A	10.00%1
Kenya (onshore andoffshore)	Block L6	60.00%	N/A	N/A
Kenya (offshore)	Block L9	30.00%2	N/A	N/A
Australia (WA offshore)	WA-457-P	100.00%	N/A	N/A
	WA-458-P	100.00%	N/A	N/A
Australia (WA onshore)	EP104	8.89%	N/A	N/A
	R1	8.00%	N/A	N/A
Australia (WA onshore)	L15	12.00%	N/A	N/A

1 Farm-out to ConocoPhillips

2 Awaiting Kenyan Government approval

• Refer to cautionary statement in relation to prospective resources on page 6

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