FAR LIMITED — Interim / Quarterly Report 2019

Oct 30, 2019

==> picture [595 x 172] intentionally omitted <==

----- Start of picture text -----

01 July – 30 September 2019
----- End of picture text -----

Highlights

• FAR acquires additional 10% interest in Blocks A2 & A5 in The Gambia

• Combined Prospective Resources for blocks A2 & A5, The Gambia assessed at 1.2billion barrels*

• SNE Field development offshore Senegal targeting a year end FID

• Serrekunda Lower Basic School renovation in The Gambia completed

• Dr Julian Fowles appointed as Director

• Cash at end of quarter US$26.9M

Projects update

Offshore Senegal

RSSD (Rufisque, Sangomar and Sangomar Deep) Senegal

SNE Field development

FAR and its Joint Venture partners are progressing post FEED activities for the SNE Field development offshore Senegal targeting a final investment decision (FID) by the end of 2019.

In August, an updated draft of the Development and Exploitation Plan for the SNE Field was submitted to the Ministry of Petroleum and Energies. Draft submissions are being made as progress on the various elements of the plan are finalised so that the Ministry of Energies has time to review and comment before the final submission is made in the next quarter. Because of this ongoing collaboration with the Ministry of Energies, it is anticipated that the approval of the plan will be granted in time for the planned end of year FID.

Concurrent with finalising the economics for the SNE Field development, a cost optimisation exercise has been undertaken to identify areas where the JV can add further value over the 3- year development phase have been implemented.

Figure 1: Location of FAR’s MSGBC licences

• Refer to Cautionary Statement in this report (page 5) relating to estimates of prospective resources

==> picture [596 x 84] intentionally omitted <==

The FAN and SNE North multi azimuth, high definition 3D seismic survey commenced in July and is scheduled to complete (including a 3D survey over the development area for SNE) at the end of the year.

Following the end of the quarter, FAR released the economic data for the development of the SNE oil field ( refer ASX release 30 October 2019 ). FAR believes SNE will deliver robust economics and cash flow with a Brent oil price break-even of approximately US$33/bbl and approximately US$22/bbl from first oil. Indicative economics show a contractor share of free cash flow of US$18.80/bbl generating ~US$190M per year post CAPEX would provide significant future returns for shareholders (assuming working interest of 13.67%).

In July 2019, the Ministry of Petroleum and Energies confirmed the Joint Venture would be provided a 2-year exploration period extension to the PSC for the evaluation of the SNE North and FAN discoveries. On 29 October, the Joint Venture was notified that the Presidential decree had been received confirming the PSC extension for the appraisal of the FAN and SNE North discoveries.

Offshore, The Gambia

Blocks A2/A5

New Licences have been executed between The Government of The Gambia (GOTG) and the joint venture (JV) participants in the A2 and A5 blocks, effective from 1 October 2019. FAR Gambia Ltd (a wholly owned subsidiary of FAR Limited) has a 50% working interest in the new Licences, which represents an additional interest of 10% ( refer ASX release 1[st] October 2019 ).

Each new Licence commences on the effective date with an Initial Exploration Period of three years, followed by two optional extension periods of two years each.

In parallel with the negotiation of the new Licences, FAR has undertaken detailed geological studies in the A2 and A5 blocks, incorporating results from the Samo-1 well. Plans are now underway to undertake further 3D seismic acquisition and to drill again in 2020.

==> picture [252 x 281] intentionally omitted <==

Figure 2: Updated prospects and leads in FAR’s Gambian blocks adjacent to the SNE field

Page 2

• Refer to Cautionary Statement in this report (page 5) relating to estimates of prospective resources

==> picture [596 x 84] intentionally omitted <==

In October, FAR completed detailed geotechnical studies incorporating the Samo-1 well results and data, and assessed significant hydrocarbon resource potential in its two blocks offshore The Gambia ( refer ASX release 30[th] October 2019 ). FAR has identified large prospects similar to the “shelf edge” plays we have successfully drilled in Senegal and assessed prospective resources of 1.2 billion bbls across the four main prospects (gross, unrisked, best estimate, prospective resource) as shown in Table 1.

FAR is currently reprocessing the seismic in A2 using the data from Samo-1 and Full Waveform Inversion (FWI) processing to improve the depth model for the Soloo, Bambo, Jobo and other prospects in A2. This work is considered essential before selection of a drilling candidate for 2020.

Gambia prospects	Block	Best Estimate
		(mmbbls)*
		P50
Soloo 410	A2	126
Soloo 440	A2	26
Soloo (Arithmetic Sum)	A2	152
Bambo S390	A2	454
Jobo S172	A2 & A5	280
Malo S186	A5	137
Malo S540	A5	219
Malo (Arithmetic Sum)	A5	356
Total all prospects		1,242
Total net to FAR		621

Table 1: FAR’s prospective resources for Blocks A2 & A5, The Gambia

*The estimated quantities of Petroleum that may potentially be recovered by the future application of a development project relate to undiscovered accumulations. These estimates have an associated risk of discovery and a further risk of development. Further exploration and appraisal is required to determine the existence of a significant quantity of potentially moveable hydrocarbons.

Guinea-Bissau

No update from the previous quarter.

Kenya L6 Block

No update from the previous quarter.

NW Shelf (Australia)

Final deliverables for processing of the Davros Extension MC3D data remain on schedule to be received in Q1 2020.

Page 3

• Refer to Cautionary Statement in this report (page 5) relating to estimates of prospective resources

==> picture [596 x 84] intentionally omitted <==

Community and Social Projects

Following the successful renovation of primary schools in Senegal, FAR undertook a renovation of a Gambian primary school as part of the Gambian Joint Venture’s social program. Works have now been completed in The Gambia at the Serrekunda Lower Basic School, which caters for 1,500 students from grades 1 to 6. Electrical works were completed which included installation of over 1000m of electrical cabling, installation of waterproof lighting, demolition and reinstallation of concrete columns and roofing replaced as well as new plastering and painting.

==> picture [230 x 173] intentionally omitted <==

==> picture [219 x 147] intentionally omitted <==

The objective of installing the lighting was to improve safety and security around the school and provide a well-lit area that could be used for community activities in the evening. The basic maintenance and repairs to the school were well needed to ensure the safety of the students. Rolf Stork, the FAR Gambian Asset Manager was present for the ceremony to celebrate the completion of the works. The newly lit school grounds were immediately used for soccer training by the local enthusiasts - more photos and videos can be found on our website and YouTube channel.

Corporate

Following the end of the quarter, the Board appointed Dr Julian Fowles as a non-executive director of the Company ( refer ASX release 15[th] October 2019). Julian has a background in petroleum geology, with over 30 years of international oil and gas industry experience across many operating environments and regimes, including 17 years with Shell International, as well as positions with other international companies in India and Brazil.

Page 4

• Refer to Cautionary Statement in this report (page 5) relating to estimates of prospective resources

==> picture [596 x 84] intentionally omitted <==

Management comment

Although the event was after the end of the quarter, the release of the economics for the SNE Field development offshore Senegal marks a major milestone for FAR. The activities around finalisation of these data and the CAPEX optimisation exercise undertaken by the JV dominated FAR’s activities for the quarter.

FAR believes the quality of the SNE Field and the robust economics for the development should result in a significant net cash flow to FAR from first oil production at the end of 2022 for the life of the field. The production of oil is planned to ramp up over three months from first oil to a steady 100,000 bbls per day. FAR’s share of this oil would be 13.67% (assuming that Petrosen takes up its option to increase its working interest from 10% to 18%) or 13,670 bbls per day. In that event, FAR would be one of the largest oil producers listed on the ASX.

This would be a wonderful achievement for FAR and its shareholders and the Government of Senegal, being their first offshore oil development. The anticipated revenues from production share, Petrosen profits and taxes will be fundamental to the country achieving the goals of the 2030 Emergent Plan.

In FAR’s view the recovery estimates of the oil from the SNE reservoirs, at an average of 13%, is conservative and there is potential, given analogues for recovery rates for fields in West Africa, that the productivity of the wells could potentially double. There is also possible upside in the production of gas and the potential to tie back oil from the FAN and SNE North/Spica discoveries if the appraisal is successful. FAR is delighted at the receipt of the Presidential decree confirming the extension of the PSC over the evaluation area for the appraisal of these discoveries.

It remains important to the JV to take advantage of the rates locked in with the key contractors of the development and to preserve the timetable to first oil, to achieve an FID by the end of the year. The building blocks have been laid with the Ministry of Energies for submission and timely approval of the exploitation plan to start up the development in January 2020.

FAR also had a successful quarter in closing out arrangements with the Government of The Gambia and our JV partner PETRONAS for the award of new licences over the A2 and A5 blocks. Under these licences, FAR remains operator and has increased its working interest to 50%. FAR is now in the first exploration period of each new licence which is a 3 year term and includes a well in either block and 3D seismic as the minimum work commitment.

FAR has completed the work to integrate the results from the Samo-1 well into the regional geology. The result is a new inventory of prospects and leads across the two blocks. The JV plans to drill a well in Q3 next year and work is ongoing to select the well location. FAR has commenced a farm out process to bring in a new partner to share the cost of the drilling. It is anticipated that this process may complete by mid 2020. FAR looks forward to bringing news to our shareholders over the coming months as we prepare to drill.

With respect to the arbitration proceedings between FAR and Woodside Energy Senegal BV, post hearing submissions and rebuttals were submitted as planned during the quarter. All planned submissions to the tribunal before the ruling have now been made. Subject to there being no extensions made by the tribunal, a ruling is expected by the end of the year.

During the December quarter, Senegal will be the primary focus of FAR’s expenditure and effort as we join our JV partners in making the necessary arrangements to take FID at the end of the year, including signoff for the FPSO contract, submission of the final development plan, conclude financing arrangements and work with the Government of Senegal for an end of year approval for the exploitation licence.

Page 5

• Refer to Cautionary Statement in this report (page 5) relating to estimates of prospective resources

==> picture [596 x 84] intentionally omitted <==

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. The Prospective Resource estimates provided in this report are Low Estimate, Best Estimate and High Estimate and represent that there is a 90%, 50% and 10% probability respectively that the actual resource volume will be in excess of the amounts reported.

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, 23/10/2019 (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 Engineer 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 or License.

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 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.

Page 6

• Refer to Cautionary Statement in this report (page 5) relating to estimates of prospective resources

==> picture [596 x 84] intentionally omitted <==

Top 10 shareholders (as at 31 October 2019)

	Shareholder	Units	%
1.	CITICORP NOMINEES PTY LIMITED	1,096,429,585	17.46
2.	HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	553,707,618	8.82
3.	FARJOY PTY LTD	514,463,236	8.19
4.	J P MORGAN NOMINEES AUSTRALIA PTY LIMITED	370,665,796	5.90
5.	CITY SECURITIES LTD	298,314,832	4.75
6.	BUTTONWOOD NOMINEES PTY LTD	102,228,562	1.63
7.	BRISPOT NOMINEES PTY LTD	88,217,801	1.40
8.	MR OLIVER LENNOX-KING	75,647,869	1.20
9.	UBS NOMINEES PTY LTD	70,275,105	1.12
10.	TOAD FACILITIES PTY LTD	68,528,589	1.09
	TOTAL	3,238,478,993	51.56

Page 7

• Refer to Cautionary Statement in this report (page 5) relating to estimates of prospective 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

(Expressed in United States dollars unless otherwise stated)

Name of entity

FAR Ltd ABN Quarter ended (“current quarter”) 41 009 117 293 30 September 2019

Consolidated statement of cash flows	Current Quarter US$’000	Year to date (9 months) US$’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 (used in) operating activities	5 (3,485) - - (701) (762) - 142 (2) - - 89	5 (9,150) - - (2,080) (1,194) - 296 (28) - - 378
	(4,714)	(11,773)

• See chapter 19 for defined terms 1 September 2016

Page 1

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

Consolidated statement of cash flows	Current Quarter US$’000	Year to date (9 months) US$’000
2. Cash flows from investing activities 2.1 Payments to acquire: (a) property, plant and equipment (b) tenements, (c) investments (d) exploration and evaluation 2.2 Proceeds from the disposal/farm-out of: (a) property, plant and equipment (b) tenements# (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 – Loans to Joint venture 2.6 Net cash (used in) investing activities	(11) - - (3,703) - - - - - - (366)	(42) - - (9,259) - 1,375 - - - - (2,846)
	(4,080)	(10,772)
#receipt of conditional consideration from farm-out activities
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 – Payment of obligations under lease 3.10 Net cash from financing activities	- - - (20) - - - - (100)	31,507 - - (1,392) - - - - (272)
	(120)	29,843

• See chapter 19 for defined terms 1 September 2016

Page 2

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

Consolidated statement of cash flows	Current Quarter US$’000	Year to date (9 months) US$’000
4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of period(i) 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	35,771 (4,714) (4,080) (120) 40	19,540 (11,773) (10,772) 29,843 59
	26,897	26,897
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 US$’000	Previous Quarter US$’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other – Term deposits(i) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	4,163 22,447 - 287	2,818 32,744 - 209
	26,897	35,771
(i) including a term deposit of U$201K (A$297K) restricted cash and not readily available for use. This term deposit is held as security over the Company’s corporate head office lease in the form of a bank guarantee. The remaining U$86K is held as unrestricted term deposit and available for use on maturity. 6. Payments to directors of the entity and their associates Current quarter US$'000 6.1 Aggregate amount of payments to these parties included in item 1.2 276 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

6.1 includes special exertion fees paid to a Non-Executive Director during July and August for services in relation to the Senegal project development financing

• See chapter 19 for defined terms 1 September 2016

Page 3

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

7.	Payments to related entities of the entity and their	Current quarter
	associates	US$'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

	8. Financing facilities available Add notes as necessary for an understanding of the position Total facility amount at quarter end $US’000 Amount drawn at quarter end US$’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 $US’000	Amount drawn at quarter end US$’000
		-	-
		-	-
		-	-

9. Estimated cash outflows for next quarter	US$’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 9.7 Total estimated cash outflow	13,000 - - 690 390 -
	14,080

• See chapter 19 for defined terms 1 September 2016

Page 4

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

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

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: ............................................................ Date: 31 October 2019 Company secretary

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

Page 5