FAR LIMITED — Interim / Quarterly Report 2015

Jul 30, 2015

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01 April – 30 June 2015
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Highlights

• Appraisal of world class SNE discovery to commence Q4 2015

• Three firm wells in first phase evaluation

• The ConocoPhillips contracted Ocean Rig Athena selected for evaluation drilling

• 3D seismic acquisition in Senegal commencing in Q3 2015

• Strong cash position of $43.5 million

Projects update

Offshore Senegal

FAR and its joint venture partners in Senegal are commencing the appraisal of the world class SNE discovery in October of this year. The three wells in the firm drilling program will be drilled using the ConocoPhillips contracted Ocean Rig Athena drillship. Two wells will be drilled to appraise the SNE field and are aimed at progressing our understanding of field size and establishing commerciality as soon as possible. The minimum economic field size is estimated by FAR to be approximately 200 mmbbls. A third well will be the first exploration well to be drilled in the blocks following the discoveries in the FAN-1 and SNE-1 wells and will be aimed at building the resource base within tie back range of a hub development over the SNE field.

The joint venture submitted a three year evaluation work program to the Government of Senegal in early May 2015 which included the initial firm three well drilling program and a 3D seismic survey. This will be followed by further drilling and geological and engineering studies in order to confirm commerciality of a development project and leading upon success to the exploitation phase under the PSC.

The three firm wells and final seismic products in this first phase of the evaluation program are expected to be completed around mid-2016.

SNE Appraisal drilling program

The SNE discovery was ranked by IHS CERA as the world’s largest oil discovery for 2014 and will be the focus of the first phase of the joint venture’s appraisal drilling program.

Initial analysis of the SNE-1 well data showed:

• 95m gross oil bearing column with a gas cap

• Excellent Albian reservoir sands with net oil pay of 36m

• High quality oil of 32 degrees API from samples of gas, oil and water recovered to surface

• Operator’s preliminary estimates of the gross contingent recoverable resource range from a 1C of 150 mmbbls, 2C, 330 mmbbls to a 3C of 670 mmbbls (net to FAR; 1C: 23 mmbbls, 2C: 50 mmbbls, 3C: 101 mmbbls)*

The primary objective of the SNE appraisal program is to prove an economic oil volume for future commercial development of the SNE oil field. Economic analysis has determined the commercial

• Refer to Cautionary Statement in this report (page 7) relating to estimates of prospective resources

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threshold for a SNE standalone development to be >=200 mmbbls (gross). FAR believes achieving this threshold volume is a relatively low risk proposition, because SNE is estimated to contain a gross contingent recoverable resource* of 1C (P90): 150 mmbbls and 2C (P50): 330 mmbbls.

FAR believes there is additional net pay and resource potential not included in the preliminary assessment of contingent resource estimates for the SNE field. This includes thin bed reservoir sands that, recent detailed post well analysis has indicated encouraging reservoir characteristics.

Two wells in the firm well program will be located to appraise the SNE field. They are expected to intersect all potential reservoir zones and the wells will be flow tested (drill stem tested) and cored at certain intervals. Both of these wells are expected

Figure 1: Location of the FAN and SNE discoveries, offshore Senegal

to obtain key data that has the potential to contribute significantly to proving the minimum economic field size.

Each well is expected to take approximately 40 days to drill with additional days required for data acquisition. The details of the data acquisition program (including, core and testing) for each well are currently being finalised by the joint venture.

Shelf area exploration

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The FAN-1 and SNE-1 oil discoveries have given FAR encouragement that further exploration drilling will also result in more discoveries offshore Senegal. FAR estimates there are 1.5 billion barrels of gross prospective resources* (225 mmbbls net to FAR) in several prospects that lie within subsea tie-back distance to an SNE production hub (reference FAR Annual Report 2014, dated 30 March 2015).

The firm exploration well in the firm drilling program will be drilled on one of the candidate shelf prospects with the high priority ones being Bellatrix, Soleil and Sirius (Figure 2 shows the location of these shelf prospects and Table 1 gives a summary of these three prospects).

The Bellatrix prospect is a yet to be drilled Figure 2: Location of FAR undrilled prospects and SNE-1 and FAN-1 Buried Hills play which has a strong seismic amplitude response. It is located above and on the northern flank of the SNE discovery so a well can intersect both it and the SNE field. FAR assesses Bellatrix to have a high chance of success for finding hydrocarbons and if successful it would upgrade the potential for several other Buried Hill prospects located along trend.

Both Sirius and Soleil are, along with Bellatrix, within tie back range for any development over the

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SNE field. The Sirius and Soleil prospects are the same play type as the SNE field and have associated seismic amplitude anomalies. FAR assesses these prospects to have a high geological chance of success relative to other prospects.

A 2,400km[2] 3D seismic survey over the Sangomar and Rufisque blocks is planned to complement the 3D seismic coverage of the prospective acreage in the Senegal PSC contract area. The aim of this program is to close eastern boundaries of existing prospects and leads and define a prospect inventory to the north and the east. A map showing the planned seismic survey is shown in Figure 3.

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Figure 3: New 3D seismic survey outline

Prospect	Play	Best estimate prospective resource Gross*	Best estimate prospective resource Net to FAR*	Chance of discovery
Bellatrix	Buried Hill	168 mmbbls	25 mmbbls	49%
Sirius	Shelf edge	204 mmbbls	31 mmbbls	52%
Soleil	Shelf edge	101 mmbbls	15 mmbbls	43%

Table 1: Shelf prospects considered for first phase of drilling

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Ocean Rig Athena drill ship

The drill ship Ocean Rig Athena (pictured in Figure 4) has been selected by the joint venture for the new Senegal drill program. The drilling rig is under contract to ConocoPhillips until mid-2017. The Ocean Rig Athena is a 7th generation, dual derrick, dynamically positioned drill ship (Enhanced SAIPEM 10000 design) and last located offshore Angola. Ocean Rig Athena was first commissioned in 2014.

Figure 4: Ocean Rig Athena drill ship

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

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Offshore Guinea-Bissau

In late April 2015, the Government of Guinea-Bissau approved a 2 year extension to the current exploration term. The extension period begins on 26 November 2015 and concludes on 25 November 2017.

The joint venture has acquired additional 3D seismic over the shelf edge to image prospects identified in this region that are potentially analogous to the SNE discovery, offshore Senegal. This new 3D data has been specifically designed to evaluate the large Atum prospect which was previously only partially covered by 3D data. The new seismic data is being processed and will be delivered in Q4 of 2015.

The joint venture hopes to provide an update on the prospects offshore Guinea Bissau in late 2015.

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Figure 5: Location of FAR blocks offshore Guinea Bissau
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Block 2, Block 4A, Block 5A	Paying Interest
FAR	21.43%
Svenska	78.57%

Kenya (Blocks L6 and L9)

Nothing to report for this quarter.

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

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

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Australia

FAR has participated in a speculative 3D seismic survey acquired over the WA-458-P permit during the quarter. Final processed products from the survey are expected to be delivered at end of Q1 2016.

FAR intends to farm-down its high interest in these permits.

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

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Figure 6: Location of WA-457-P and WA-458-P

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Management comment

FAR Ltd Managing Director, Cath Norman said, “FAR and its partners have made significant progress this year in analysing the extensive geological data in and around both of our large oil discoveries in the FAN-1 and SNE-1 wells in Senegal. Commencing and delivering the first phase of the appraisal of the SNE discovery, continuing the evaluation of FAN discovery and unlocking the potential of the numerous exploration prospects offshore Senegal remain the priorities for FAR for the remainder of the year and into 2016.

“The Senegal joint venture is in the final stages of preparing for the 2015 drilling program scheduled to commence in October. FAR is aiming to prove and surpass the minimum economic threshold of 200 mmbbls with the first two appraisal wells and we have significant existing funding for these two wells. FAR also remains extremely excited about further exploration prospects on the continental shelf and evaluating this prospectivity in a third well in the firm program.

“FAR enters this quarter with a strong cash position of $43.5 million and no debt. To accommodate a period of rig maintenance and additional time spent on “success case” logging and drilling in 2014 for both wells, FAR was required to fund its share of costs above the carry cap provided by ConocoPhillips and Cairn Energy. These payments were finalised during the quarter. FAR holds the majority of its cash in US$ which has meant it has been hedged against the falling Australian dollar in the past months and are in a strong financial position as we enter into the forthcoming drilling program.

“FAR’s Annual General Meeting on Friday 15 May was very well attended by over 100 shareholders. During the meeting FAR welcomed Reg Nelson to the board of directors. His wealth of experience in the oil and gas industry will be very valuable to FAR as we navigate our way from discovery through evaluation and exploitation of the Senegal asset in the coming years.

“Following the AGM, Gordon Ramsay and I took our AGM presentation to our shareholders in Perth, Sydney and the Gold Coast where it was a pleasure to meet more of our shareholders and give an update on our progress to date.

“The latter half of 2015 promises to be exciting for FAR shareholders as we endeavour to unlock value through appraisal and exploration drilling that will continue into 2016. With the spud of the first appraisal well due in approximately 10 weeks, we look forward to bringing our shareholders further updates regarding well locations and rig contract details. Regarding the latter, the joint venture is fortunate to be undertaking the appraisal drilling in a period where rig rates have almost halved in the last 6 months. This will allow the joint venture to complete the drilling and testing program at significantly reduced costs.

“The recent run of unsuccessful exploration wells around Africa is a sobering reminder of the significance of the basin opening discoveries offshore Senegal and the company making opportunity we have ahead of us over the forthcoming appraisal program.”

For more information please contact FAR Limited Cath Norman Managing Director T: +61 3 9618 2550 Level 17, 530 Collins Street Gordon Ramsay Executive General Manager, F: +61 3 9620 5200 Melbourne VIC 3000 Australia Business Development E: info@far.com.au www.far.com.au Media enquires Ian Howarth Collins Street Media T +61 3 9600 1979

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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 - All prospective resource estimates presented in this report are prepared as at 27/2/2013, 11/3/2014, 5/2/2014 and 13/04/2015 (Reference: FAR ASX releases of 27/02/2013, 11/3/2014, 5/2/2014 and 13/04/2015) . 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.

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Project table

Project and Location	Tenement	Beneficial Interest	Acquired during	Disposed during
		at end of quarter	the quarter	the quarter
Guinea-Bissau (offshore)	Sinapa Block 2	15.00%	–	–
	Esperanca Blocks 4A	15.00%	–	–
	& 5A
Senegal (offshore)	Rufisque,	15.00%	–	–
	Sangomar	15.00%	–	–
	Sangomar Deep	15.00%	–	–
Kenya (offshore)	Block L6	60.00%	–	–
Kenya (onshore)	Block L6	24.00%	–	–
Kenya (offshore)	Block L9	30.00%	–	–
Australia (WA offshore)	WA-457-P	100.00%	–	–
	WA-458-P	100.00%	–	–

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