FAR LIMITED — Interim / Quarterly Report 2019

Apr 29, 2019

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01 January – 31 March 2019
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Highlights

• MODEC International Inc awarded FEED contract for SNE Field Development Phase 1 FPSO facility

• Diamond Offshore awarded well-based contract for drilling SNE Field Development

• Davros Extension multiclient 3D seismic survey completed on North West Shelf block WA458-P

• AGM to be held Thursday, 30 May 2019

• Update to corporate Climate Change Policy

• Cash and term deposits at end of quarter of AU$20.1M, no debt

Projects update

Offshore Senegal

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

In January 2019, the Rufisque Offshore, Sangomar Offshore and Sangomar Deep (RSSD) Joint Venture secured an extension of the Production Sharing Contract (PSC) for the SNE area until 4 December 2019. This extension gives security over the PSC whilst FEED and financing activities are undertaken by the Joint Venture in the lead up to FID in the second half of the year.

During the quarter, front-end engineering design (FEED) activities for the SNE Field development continued as planned. In February, the contract for the floating production storage and offloading (FPSO) facility was awarded to MODEC International Inc for the conversion of an existing tanker. The FPSO will be designed to allow for the integration of subsequent SNE development phases, including gas export to shore and future subsea tie-backs from other reservoirs and fields. Phase 1 of the development will target an estimated 230 mmbbl of oil resources ( P50 gross, refer to Cautionary Statement in this report, page 6 relating to estimates

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Figure 1: Location of the FAR RSSD and Gambian licences

of prospective resources ) from 11 producing wells, 10 water injectors and 2 gas injectors.

Subsequent to the quarter, a high-definition 3D marine seismic survey contract was awarded to Shearwater GeoServices Ltd to improve reservoir definition supporting SNE well positioning and optimisation. The survey is scheduled to commence in June 2019.

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

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Also subsequent to the quarter, the Operator announced that Diamond Offshore has been awarded a contract for drill rigs Ocean Blackhawk and Ocean BlackRhino with drilling to begin 4Q 2020 and 1Q 2022. The work scope includes 18 wells with options for 8 additional wells over a combined duration of 4 years.

A2/A5, The Gambia 40% interest

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Following the drilling of Samo-1 well in offshore The Gambia, FAR has continued with the evaluation, data integration and interpretation studies. These studies have confirmed that the A2/A5 blocks have access to an active hydrocarbon charge system, and the area contains excellent reservoir and seal facies, forming key components for potential successful future prospects. The subsurface work has further progressed to identify and confirm leads and prospects for potential drilling in the future. A number of promising future targets are emerging from this work.

This workstream will be completed during the quarter when a decision to move forward into the next licence phase for A2/A5 will be made with Joint Venture partner, PETRONAS, before the end of May.

Guinea-Bissau 21.4% interest

Preparations to drill offshore Guinea-Bissau are progressing and FAR looks forward to bringing news of timing and well location to its shareholders in the coming weeks.

Kenya L6 Block 60% interest

No update from previous quarter.

NW Shelf (Australia) 100% interest

During the quarter, seismic acquisition across permit WA-458-P began and was subsequently safely and successfully completed. FAR has a 100% interest in permit WA-458-P that lies within the prolific, oil-producing Dampier Sub-basin - host to some of the largest oil discoveries on the Northwest Shelf to date. FAR’s preliminary geotechnical evaluation of the prospectivity of WA-458-P has identified a mix of structural and combined structural-stratigraphic leads and prospects characterising four independent play types at established reservoir levels that have proven successful in nearby discoveries. FAR anticipates receiving the final processed data in H2 2019 and will progress with completing its evaluation of the permit using the new seismic data. Once complete, FAR intends to farm down its interest in the permit.

Social Responsibility

During the quarter, FAR reported that works have completed on the expansion and renovation of the labour ward at Soma Regional Hospital in The Gambia. FAR partnered with UK Jarra Association, a registered charitable organisation in UK and The Gambia to renovate, expand and equip the labour ward of Soma Regional Hospital in Lower River Region (LRR), The Gambia. FAR was responsible for the construction of the delivery ward extension, repair and refurbishment of the existing delivery ward and the provision and fitting for the expanded ward. The renovated ward was officially opened on the 22nd February in Soma, The Gambia.

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

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Corporate

FAR’s Annual General Meeting (AGM) will be held at 10:00am (AEST) on Thursday, 30 May 2019 at Baker McKenzie, Level 19, 181 William St, Melbourne, Victoria. A recording will be made available for later viewing.

Management comment and events post end of quarter

This quarter has been an intense period of work for the FAR team on both our Gambia and Senegal projects.

We are completing the assessment of the future prospectivity of the A2 and A5 permits offshore The Gambia over the coming weeks as the Samo-1 data has been integrated and forward planning for the permits has commenced. The next step is to reach alignment with our JV partner, PETRONAS, on the work program going forward and to move into the next licence period. This next period will require the drilling of an exploration well on either block in the two years from 1 July 2019. FAR remains operator of these blocks and continues its constructive and positive working relationship with both PETRONAS and the Government of The Gambia. We look forward to bringing news of the future plans to our shareholders as they are agreed. FAR remains very positive about the hydrocarbon prospectivity of blocks A2 and A5.

It is very pleasing that the FEED period for the SNE Field development has been progressing as planned. As has been announced, a number of major contracts have been awarded during this time and the JV is progressing towards FID in the latter half of 2019. Joint Venture project financing activities continue in a positive vein and we look forward to settling the development costs and terms of the project financing so that we can finalise FAR’s outstanding financing arrangements. The Government of Senegal remains supportive of the Joint Venture’s plans in Senegal and we look forward to moving through the many milestones to reach FID.

In addition to the planning of the development, the Senegal Joint Venture is negotiating the terms of the extension to the PSC for the appraisal of the FAN, FAN South and SNE North discoveries. We look forward to bringing positive news regarding this application in the coming months. Each of these discoveries is within tieback distance of the hub being planned over SNE and oil from these discoveries is anticipated to be tied into later phases of the SNE Field development.

Activity in the wider MSGBC Basin continues to grow, the Total operated well in the deepwater block to the west of the FAR Senegal acreage is due to be spudded in the second half of the year. CNOOC will be operating an estimated 2 exploration wells in the AGC Profond in early 2020 and FAR is looking to preserve an option to drill in A2/A5 in early 2020 as well as participate in a Svenska operated well offshore Guinea-Bissau in the same timeframe. The interest in the MSGBC Basin is growing and the results of The Gambia licencing round should be announced imminently.

FAR looks forward to the forthcoming ICC hearings related to the arbitration over FAR’s right to pre-empt the ConocoPhillips sale of 35% interest in the Senegal project to Woodside. These hearings are scheduled for early July in Paris.

FAR completed another community program in The Gambia during the quarter at the Soma Regional Hospital and held the inauguration ceremony. FAR partnered with the UK Jarra Association to renovate, expand and equip the labour ward of Soma Regional Hospital in the Lower River Region of the Gambia. FAR was responsible for the construction of the delivery ward extension, repair and refurbishment of the existing delivery ward and the provision and fitting for the expanded ward. UKJA was responsible for sourcing the medical equipment for the expanded ward including; medicine storage facilities – drug refrigerator, sterilisation machines, new beds and privacy screening. This upgrade will now see the hospital be able to facilitate the 100 deliveries per month in the region. The renovated ward was officially opened on the 22nd February in Soma, The Gambia and it was very pleasing to be able to play a role in maternal and baby health care in The Gambia .

We look forward to the commencement of our next social program in country. We invite our shareholders to follow our Twitter feed for more regular updates on our social projects.

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

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FAR acknowledges growing global and stakeholder concerns related to climate change and has recently updated the corporate climate change policy on our website ( https://www.far.com.au/wpcontent/uploads/2019/04/FAR-Climate-Change-Policy-20190429.pdf ).

Although FAR is, at this time, not a producer of oil and gas, we recognise our responsibility to ensure that our day to day operations now and into the future are undertaken so as to minimise our impact on climate change and reduce greenhouse gas emissions. We welcome feedback from our shareholders on this issue. FAR undertakes a quarterly review and update of the corporate risk register and the risks to our business from climate change are addressed in detail in this register.

We are looking forward to our Annual General Meeting of Shareholders in Melbourne on Wednesday, 30 May, to be held once again in the offices of Baker McKenzie. We welcome shareholders to join us for refreshments after the event.

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

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.

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

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Top 10 shareholders (as at 30 April 2019)

	Shareholder	Units	%
1.	CITICORP NOMINEES PTY LIMITED	972,946,475	17.81
2.	FARJOY PTY LTD	514,463,236	9.42
3.	HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	368,319,915	6.74
4.	J P MORGAN NOMINEES AUSTRALIA PTY LIMITED	336,226,479	6.16
5.	CITY SECURITIES LTD	175,305,677	3.21
6.	MR OLIVER LENNOX-KING	75,647,869	1.39
7.	TOAD FACILITIES PTY LTD	68,528,589	1.25
8.	NATIONAL NOMINEES LIMITED	58,057,487	1.06
9.	HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	51,892,945	0.95
10.	FOUNTAIN OAKS PTY LTD	34,200,366	0.63
	TOTAL	2,655,589,038	48.62

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• 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

Name of entity

FAR Ltd ABN Quarter ended (“current quarter”) 41 009 117 293 31 March 2019

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 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 (used in) operating activities	- (3,806) - - (975) (103) - 84 - - - 404	- (3,806) - - (975) (103) - 84 - - - 404
	(4,396)	(4,396)

• 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

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	(13) - - (3,616) - 1,934 - - - - (845)	(13) - - (3,616) - 1,934 - - - - (845)
	(2,540)	(2,540)

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 (used in) financing activities	- - - - - - - - (122)	- - - - - - - - (122)
	(122)	(122)

• 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

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	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	27,753 (4,396) (2,540) (122) (294)	27,753 (4,396) (2,540) (122) (294)
		20,401	20,401
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(ii) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)		4,901 15,203 - 297	5,026 22,727 - -
		20,401	27,753(i)

(i) Cash at the end of the previous quarter reported in the Appendix 5B lodged on 31 January 2019 was $30,301 however cash was reduced to $27,753 in the audited 2018 Annual Report reflecting a year end adjustment to FAR’s share of Joint Venture cash.

(ii) the Company’s term deposit of $297k is 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.

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	395
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 for services in relation to the
Senegal project development financing.

• 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

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

	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	$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 9.7 Total estimated cash outflow	9,000 - - 960 340 -
	10,300

• 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

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: 30 April 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

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