FAR LIMITED — Interim / Quarterly Report 2017

Jan 30, 2018

01 October – 31 December 2017

Highlights

• 1.1 billion barrels of prospective oil resources assessed offshore The Gambia

• Joint venture completing SNE first phase development concept select

• Preparations continue to drill offshore The Gambia in late 2018

• Cash and term deposits at end of quarter of AU$49.9m

Projects update

RSSD (Rufisque, Sangomar and Sangomar Deep) Senegal (FAR 15%)

During the quarter, the RSSD joint venture confirmed completion the of SNE field appraisal and progressed predevelopment activities for the first phase of development. The extensive SNE field with an area covering approximately 350km[2] has been assessed by FAR to contain 640mmbbls on a full field basis (100% basis, best estimate, Contingent Resources, unrisked). The joint venture aims to have all Government approvals in place by the end of 2018, with a target of first oil in 2021-2023.

The joint venture is completing work in relation to a concept select decision. The development concept being considered by the joint venture is a standalone FPSO Figure 1: Locations on RSSD wells facility with subsea wells and infrastructure. The project will be designed to allow flexibility for anticipated subsequent development phases with subsea tie backs from other reservoir intervals and fields.

The first phase of the SNE development is expected to have an initial well count of approximately 25 wells principally in the S500 lower reservoirs.

In line with the terms of the Production Sharing Contract with the Government of Senegal, the joint venture has made a submission to evaluate the SNE North discovery and an application to evaluate the FAN South discovery is currently being compiled. Both discoveries are in tie-back range of a hub development at SNE and, if the appraisal is successful, will be tied into the SNE development in later phases of development.

The joint venture is also reviewing recent exploration well results and the potential for further exploration drilling operations within the permit area.

• Refer to Cautionary Statement in this report (page 10) relating to estimates of prospective and contingent resources

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Djiffere block option

No update this quarter.

A2/A5, The Gambia

During the quarter FAR completed detailed geotechnical studies and assessed significant hydrocarbon resource potential in its two blocks offshore The Gambia. The Blocks A2 and A5, covering 2,682km[2] , are adja�e�t to a�d o� tre�d �ith FAR’s �orld �lass “NE oil field a�d ha�e sig�ifi�a�t e�ploratio� potential. A2 and A5 sit within the rapidly emerging and prolific Mauritania-Senegal-Guinea-BissauConakry ��M“GBC�� Basi� a�d lie appro�i�atel� ��k� offshore i� �ater depths ra�gi�g fro� 5� to 1,500 metres (Figure 2).

From 1,504km[2] of modern 3D seismic data acquired in A2 and A5, FAR has identified large prospects si�ilar to the �shelf edge� pla� FAR has su��essfull� drilled i� “e�egal. FAR has �apped t�o drilla�le prospects, Samo and Bambo and additional leads in the blocks (Figure 3).

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Figure 2. Location of The Gambia licences

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Figure 3. A2 & A5 prospects and leads

An independent oil and gas advisory firm, RISC Operations Pty Ltd (RISC), conducted an audit of FAR’s internal estimate of Prospective Resources for the Samo and Bambo prospects. The two prospects have a combined best estimate Prospective Resource of 1.1 billion barrels on a gross unrisked basis (926 million barrels net to FAR) as set out in Table 1 below.

Gambia prospects	Low Estimate	Best Estimate	High Estimate
	(mmbbls)*	(mmbbls)*	(mmbbls)*
	P90	P50	P10
Samo	335	825	1713
Bambo	117	333	902
Total all prospects	452	1158	2615
Total net to FAR	362	926	2092

Ta�le �. “u��ar� of prospe�ti�e resour�es i��luded i� RI“C’s No�e��er ���7 report

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• Refer to Cautionary Statement in this report (page 10) relating to estimates of prospective and contingent resources

FAR is progressing plans to drill the Samo prospect in late 2018.

During the period, FAR also received expressions of interest from third parties to farm into the A2 and A5 blocks.

Block A2, A5	Paying Interest
FAR	80% Operator
Erin	20%

Kenya L6 Block (24% operator interest)

No update from previous quarter.

Kenya Block L6	Paying Interest Onshore	Paying Interest Offshore
FAR	24% Operator(1)	60% Operator
Pancontinental Oil and Gas	16%	40%
Milio Group	60%(1)

• 1) Subject to the completion of the farm-out agreement with Milio.

NW Shelf (Australia) (100% Operator)

No update from previous quarter.

Community and Social Responsibility

During the quarter, as joint venture partner in the RSSD project offshore Senegal, FAR continued its participation in the JV led CSR programs including English language training and microfinancing for businesses in country.

In addition, FAR continued to support the training and skills transfer program to educate local graduate engineers in rig and wellsite operations through transport subsidies to classes. To date, the program has supported 54 engineers and steps are now being undertaken to ensure the graduates are employed in local drilling operations in the region.

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Following the very successful primary school renovation in the city of Thiess, outside Dakar, FAR is assessing the needs and planning the renovation of another primary school in rural Senegal. The primary schools are focal points for the community and FAR is very pleased to announce that early feedback from the Thiess school renovation is that more young girls are staying at the school beyond puberty now that there are separate boys and girls toilet facilities with running water and flushing toilets. The new roof has prevented leaks in the rainy season so that books in the library are not under threat of water damage.

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• Refer to Cautionary Statement in this report (page 10) relating to estimates of prospective and contingent resources

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As operator of the A2 and A5 blocks offshore The Gambia, FAR has initiated CSR programs in country. A large primary school for 2000 young students is being renovated and toilet facilities are being installed, 200 rubbish bins have been installed at a popular market outside Banjul which is also a tourist attraction in country and we are investigating options for supporting microfinancing opportunities in country.

In both coutries, FAR continues to distribute its soccer balls to rural communities and suport local competitions through their provision of playing kits.

Management comment and events post end of quarter

It’s great to see the Bre�t oil pri�e touching US$70/bbl in recent days and the related climb over the last couple of months has seen the oil industry activity picking up and investor confidence coming back into the sector.

The last quarter of the 2017 year has been an extremely busy one for FAR. Our technical team continues to i�tegrate the drilli�g results fro� the �ear’s drilli�g progra� i� “e�egal that i��ludes t�o �e� discoveries in SNE North and FAN South as well as the conclusion of the appraisal drilling program. The process of planning the first phase of the development of the SNE field is well underway and the Senegal joint ve�ture is i� the fi�al stages of ��o��ept sele�t� �efore su��itti�g the E�aluatio� Report to the Government of Senegal in May this year. The Evaluation Report is the key document describing the concept to commercialise the SNE field. This will be broadly, a phased development aimed at delivering first oil in 2021-23. The first phase will be focused on developing the core of the SNE field where the 500 series reservoir sands are thickest and subsequent phases focused on tying back the oil on the flanks of the SNE field, satellite discoveries and producing gas from the field.

FAR has been planning a revised update of the contingent resources for the SNE field and the neighbouring discoveries for release. The process is intimately related to the understanding of the commercialisation of the SNE field and is drawing to a close as the joint venture also concludes its position. FAR will release this data, after review by RISC, when this process is completed. The focus has of course been on ensuring that the SNE development planning is progressing as per the tight schedule proposed by the joint venture to enable government approval of the development plan by November this year and achieve the milestone of Final Investment Decision (FID) in early 2019.

In the previous quarter, notices of discovery were submitted to the Government of Senegal for the two new 2017 discoveries made with the FAN South-1 and SNE North-1 wells. The JV has made a submission to the Government for an evaluation program and period for the SNE North discovery and is concluding the application for the evaluation program for the FAN South discovery. Both discoveries are within tieback range to the planned development over the SNE field and hence, current plans are that future evaluation of these discoveries will be undertaken with an eye to tying to SNE in later phases of the field development. This will optimise capital expenditure and prolong the producing life of the field.

FAR hosted a �Dakar “oiree� i� alig��e�t �ith the M“GBC Basi� �o�fere��e i� Dakar i� De�e��er that was a resounding success. The Minister for Petroleum and Energy was our distinguished guest as well as the Mi�istr�’s Dire�tor of H�drocarbons, Secretary General, Director of Cabinet, Senior Technical Ad�isor, the Dire�tor Ge�eral of Petrose�, the Preside�t’s te�h�i�al ad�isers a�d other ho�oured guests. We were also joined by over 60 of our industry partners and peers from around the world. The Minister

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• Refer to Cautionary Statement in this report (page 10) relating to estimates of prospective and contingent resources

ki�dl� a�k�o�ledged FAR’s lo�g a�d respe�ted positio� i� “e�egal a�d that the “NE a�d FAN dis�o�eries really do have the ability to transform the country. It was a wonderful evening and we look forward to this being an annual event.

The year has been a particularly exciting one for our project in The Gambia. Following the Government approval for our farmin to the A2 and A5 blocks in the previous quarter, FAR has assumed the role of Operator of the blocks and plans to drill the giant Samo prospect in Q3 2018 are well underway. Our office in Banjul is functioning very efficiently and FAR has a reliable videoconferencing link between the two offices to allow for easy and regular communications. We continue to also build the organisation required to operate the A2 and A5 blocks going forward.

FAR has received expressions of interest from parties interested in farming into the permits and is currently considering these offers. We look forward to bringing more news of the A2 and A5 blocks in the coming weeks as the project in The Gambia matures.

FAR also has initiated a number of social and community programs in both Senegal and The Gambia and we look forward to bringing more news of their progress in the coming months. It has been particularly heartening to hear that already our primary school renovation project in Thiess, outside Dakar, has resulted in the retention of more young girls at schools. The building of toilet facilities and in particular, separate ones for girls and boys, has had this immediate effect. As a result, we have commenced a similar project in Banjul and exploring our options for another school in Senegal.

FAR’s �udget for 2018 remains consistent with expectations from the last quarterly report – the majority of our expenditure will be in supporting the Senegal project and initiating plans to drill in The Gambia. We enter this quarter with a healthy cash position of $49.9m.

During the quarter, FAR promoted Angelique Callegari into the role of Investor Relations Manager for the company. Angelique has already made an impact in increasing our corporate communications through our T�itter feed a�d �e�site updates a�d also i�itiated the �Oil Pat�h� report �o�piled �� industry veteran Barry Fitzgerald for FAR on a monthly basis. We welcome Angelique into this role and know that she is keen to get to know our shareholders over the coming months.

At the same time, we farewell a long-standing member of the FAR team in Ian Howarth who many of you will have corresponded with in the past. Ian is taking some time out to enjoy himself and we wish him well.

• Refer to Cautionary Statement in this report (page 10) relating to estimates of prospective and contingent resources

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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 and Contingent Resources - All contingent and prospective resource estimates presented in this report are prepared as at 27/2/2013, 11/3/2014, 5/2/2014, 13/04/2015, 13/4/2016, 23/08/2016, 7/2/2017 and 21/11/2017 (Reference: FAR ASX releases of the same dates). 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 Engineers and have been prepared using probabilistic methods. The contingent resource estimates provided in this report are those quantities of petroleum to be potentially recoverable from known accumulations, but the project is not considered mature enough for commercial development due to one or more contingencies. The prospective resource 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 contingent and prospective resource estimates include Government share of production applicable under the Production Sharing Contract.

Competent Person Statement Information - The hydrocarbon resource estimates in this report have 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 Contingent and Prospective Resources in the form and context in which it appears. The Contingent and 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 looki�g state�e�ts i��lude, are �ot �e�essaril� li�ited to, state�e�ts �o��er�i�g FAR’s pla��ed operation program and other statements that are not historic facts. When used in this document, the �ords su�h as ��ould�, �pla��, �esti�ate�, �e�pe�t�, �i�te�d�, ��a��, �pote�tial�, �should� a�d si�ilar 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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• Refer to Cautionary Statement in this report (page 10) relating to estimates of prospective and contingent resources

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Top 10 shareholders (as at 30 January 2018)

	Shareholder	Units	%
1.	HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	799,168,225	14.63
2.	CITICORP NOMINEES PTY LIMITED	787,276,589	14.41
3.	FARJOY PTY LTD	514,463,236	9.42
4.	J P MORGAN NOMINEES AUSTRALIA LIMITED	308,660,302	5.65
5.	MR REX SEAGER HARBOUR	98,293,383	1.80
6.	MR OLIVER LENNOX-KING	75,647,869	1.39
7.	BNP PARIBAS NOMS PTY LTD	72,338,173	1.32
8.	TOAD FACILITIES PTY LIMITED	67,528,589	1.24
9.	NATIONAL NOMINEES LIMITED	56,624,826	1.04
10.	HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED <EUROCLEAR	51,546,945	0.94
	BANK SA NV A/C>
	TOTAL	2,831,548,137	51.84

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• Refer to Cautionary Statement in this report (page 10) relating to estimates of prospective and contingent resources

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

+Rule 5.5

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16

Name of entity

Name of entity	Name of entity
FAR Ltd
ABN Quarter ended (“current quarter”) 41 009 117 293 31 December 2017
41 009 117 293	31 December 2017

Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 months) $A’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) staff costs (e) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Research and development refunds 1.8 Other (provide details if material) 1.9 Net cash from / (used in) operating activities	- (8,355) - - (822) (380) - 166 - - - -	- (29,600) - - (3,901) (1,742) - 599 - - - -
	(9,391)	(34,644)
2. Cash flows from investing activities 2.1 Payments to acquire: (a) property, plant and equipment (b) tenements(Gambia Farm-in payments) (c) investments (d) exploration and evaluation	(81) 274 - (3,079)	(128) (7,111) - (28,224)

• • See chapter 19 for defined terms

1 September 2016

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 months) $A’000
2.2 Proceeds from the disposal of: (a) property, plant and equipment (b) tenements (see item 10) (c) investments (d) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other – payment for performance bond 2.6 Net cash from / (used in) investing activities	- - - - - - -	- - - - - - -
	(2,886)	(35,463)
3. Cash flows from financing activities 3.1 Proceeds from issues of shares 3.2 Proceeds from issue of convertible notes 3.3 Proceeds from exercise of share options 3.4 Transaction costs related to issues of shares, convertible notes or options 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other (provide details if material) 3.10 Net cash from / (used in) financing activities	- - - - - - - - -	80,000 - - (3,412) - - - - -
	-	76,588
4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above) 4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	61,890 (9,391) (2,886) - 314	46,978 (34,644) (35,463) 76,588 (3,532)
	49,927	49,927

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other – Term deposits 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	3,992 36,335 - 9,600	2,356 47,134 - 12,400
	49,927	61,890

6.	Payments to directors of the entity and their associates		Current quarter
			$A'000
6.1	Aggregate amount of payments to these parties included in item 1.2		425
6.2	Aggregate amount of cash flow from loans to these parties included
	in item 2.3
6.3	Include below any explanation necessary to understand the transactions included in
	items 6.1 and 6.2

7. Payments to related entities of the entity and their associates

Current quarter $A'000

• 7.1 Aggregate amount of payments to these parties included in item 1.2

• 7.2 Aggregate amount of cash flow from loans to these parties included in item 2.3

7.3 Include below any explanation necessary to understand the transactions included in items 7.1 and 7.2

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• See chapter 19 for defined terms 1 September 2016

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

8. Financing facilities available Add notes as necessary for an understanding of the position Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 8.1 Loan facilities - - 8.2 Credit standby arrangements - - 8.3 Other (please specify) - - 8.4 Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
	-	-
	-	-
	-	-

9. Estimated cash outflows for next quarter	9. Estimated cash outflows for next quarter	9. Estimated cash outflows for next quarter	$A’000	$A’000	$A’000
9.1 Exploration and evaluation 9.2 Development 9.3 Production 9.4 Staff costs 9.5 Administration and corporate costs 9.6 Other (provide details if material) 9.7 Total estimated cash outflows			15,000 - - 750 350 -
			16,100
10. Changes in tenements (items 2.1(b) and 2.2(b) above)	Tenement reference and location	Nature of interest		Interest at beginning of quarter	Interest at end of quarter
10.1 Interests in mining tenements and petroleum tenements lapsed, relinquished or reduced
10.2 Interests in mining tenements and petroleum tenements acquired or increased

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

Sign here:

............................................................ (Company secretary)

Date: 31 January 2018

Print name: Peter Thiessen

Notes

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. See chapter 19 for defined terms 1 September 2016

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