FAR LIMITED — Investor Presentation 2014

Sep 10, 2014

An African Story

Jon Keall Chief Geologist FAR Limited

Good Oil Conference Fremantle September 2014

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Disclaimer

• This presentation has been prepared by FAR Limited (‘FAR’). It should not be considered as an offer or invitation to subscribe for or purchase any shares in FAR or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for shares in FAR will be entered into on the basis of this presentation.

• This presentation contains forward-looking statements that are not based on historical fact, including those identified by the use of forward-looking terminology containing such words as ‘believes’, ‘may’, ‘will’, ‘estimates’, ‘continue’, ‘anticipates’, ‘intends’, ‘expects’, ‘should’, ‘schedule’, ‘program’, ‘potential’ or the negatives thereof and words of similar import.

• FAR cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual events or results to differ materially from those expressed or implied by the statements. The forward looking statements are expressly subject to this caution. FAR makes no representation, warranty (express or implied), or assurance as to the completeness or accuracy of these forward-looking statements and, accordingly, expresses no opinion or any other form of assurance regarding them. FAR will not necessarily publish updates or revisions of these forwardlooking statements to reflect FAR’s circumstances after the date hereof.

• By its very nature exploration and development of oil and gas is high risk and is not suitable for certain investors. FAR shares are a speculative investment. There are a number of risks, both specific to FAR and of a general nature which may affect the future operating and financial performance of FAR and the value of an investment in FAR including and not limited to economic conditions, stock market fluctuations, oil and gas demand and price movements, regional infrastructure constraints, securing drilling rigs, timing of approvals from relevant authorities, regulatory risks, operational risks, reliance on key personnel, foreign currency fluctuations, and regional geopolitical risks.

• This presentation does not purport to be all inclusive or to contain all information which you may require in order to make an informed assessment of the Company’s prospects. You should conduct your own investigation, perform your own analysis, and seek your own advice from your professional adviser before making any investment decision.

• Cautionary Statement for Prospective Resource Estimates – 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.

• Information in this report relating to hydrocarbon resource estimates has been compiled by Peter Nicholls, the FAR 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 Exploration Geophysicists 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.

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*Reference ASX releases dated 27 Feb 2013, 5 Feb 2014, 11 Mar 2014, best estimate, gross, unrisked prospective resources, 100% basis, oil only

FAR: Australia based, Africa focused

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7 licences across 2 countries

2 licences

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Head Office
Melbourne
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The year ahead

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2014 2015
SENEGAL
Sangomar Profond Drill planning Drilling FAN-1 Drilling SNE-1 Evaluation of drilling
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
L6 Offshore Farmout Drill planning Drilling
L6 Onshore Farmout Onshore Seismic planning, acquisition & processing Drill planning
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
KENYA
L9 Farmout/drill planning Farmout/drill planning
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
GUINEA BISSAU
Blocks 2, 4A & 5A Drill planning
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
AUSTRALIA
NWS G &G Farmout 3D Seismic acquisition & processing
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
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Exploration cycle

Challenges for a small company

……..high costs of drilling and 3D ……………access to finance …….limited technical resources, small team ………… no in-country infrastructure …………..high entry costs ……….typically under-resourced and underfunded

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Exploration goals for a small company

• Quality portfolio with diversity

Not locked into a single basin, country or play. Offering multiple opportunities for success/increase shareholder value

• Running room

So if you take the risk and expense of drilling, there is follow-up in the event of success

• Early entrant to build a large initial equity position

To be left with a meaningful stake when there is a monetising event or success through drilling

• Ability to add value through a work programme

If you can’t add value, how can you attract partners?

• Negotiate favourable commercial terms

Build option value

• Potential to farm down when costs increase

Ability to trade equity

• Ongoing activity

Single well results hopefully don’t cause the SP to wildly fluctuate

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FAR Early 2014

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Marketing
Field production
Field development
Appraisal and commercial evaluation
Guinea Bissau
Test prospect - well
Senegal: Fan play
Drillable prospect Economic evaluation Senegal: Shelf play
KenyaL6
Detailed exploration 3D seismic… KenyaL9
AGC Profond
Lead/prospect mapping Australia: NWS
Regional exploration 2D seismic, gravity…
Capturing opportunity Setting terms
New ventures Active new ventures
Increasing cost
Increasing value Decreasing risk
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FAR in Guinea Bissau

• Proven oil-prone basin

• 2 discoveries made on block during low oil price environment (East Sinapa - Premier 2004 and PGO 3 Exxon 1969)

• ~1 billion barrels prospective resources identified*

• Sinapa appraisal well (Sinapa West) in 2015

• Multiple follow up prospects on success

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BLOCKS 2, 4A & 5A AGC PROFOND
15% interest 8.8% interest
Operator: Svenska Petroleum Operator: Ophir Energy PLC
SENEGAL
GUINEA BISSAU
2
4A
5A
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Block 2 and Blocks 4A/5A prospects

• Unrisked best estimate, 100% basis as per FAR ASX release dated 4 February 2014

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iscovery P90 P50 P10* Sinapa (2C contingent resources) 4.4 13.4 38.9 East Sinapa (prospective resources) 1.8 7.5 34.2 West Sinapa (prospective resources) 17.7 64.7 251.7	iscovery P90 P50 P10* Sinapa (2C contingent resources) 4.4 13.4 38.9 East Sinapa (prospective resources) 1.8 7.5 34.2 West Sinapa (prospective resources) 17.7 64.7 251.7	iscovery P90 P50 P10* Sinapa (2C contingent resources) 4.4 13.4 38.9 East Sinapa (prospective resources) 1.8 7.5 34.2 West Sinapa (prospective resources) 17.7 64.7 251.7	iscovery P90 P50 P10* Sinapa (2C contingent resources) 4.4 13.4 38.9 East Sinapa (prospective resources) 1.8 7.5 34.2 West Sinapa (prospective resources) 17.7 64.7 251.7
	P90*	P50*	P10*
Sinapa (2C contingent resources)	4.4	13.4	38.9
East Sinapa (prospective resources)	1.8	7.5	34.2
West Sinapa (prospective resources)	17.7	64.7	251.7

Guinea Bissau – Sinapa discovery

• 13.4 mmbbls 2C contingent resource in Sinapa Discovery*

• Combined contingent and prospective resource 85.6 mmbbls (P50)* potential in Sinapa Project

• Upside potential (P10)* of 300+ mmbbls

• Appraisal well (2015)

• High chance of success at 36%*

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West Sinapa
Prospect
Sinapa
Discovery
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Depth map and seismic image showing the Sinapa discovery and West Sinapa prospect

• Reference FAR ASX release dated 4 February 2014

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FAR in Kenya L6

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Kipini-1
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Maridadi-1
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Onshore well mid 2015 Farm out to Milio 2014 3D seismic 2012

2D seismic Airborne Gravity

G07 2D Seismic (FAR 2007)

Capturing opportunity Setting terms Farm-in 2006

W03 2D Seismic (Woodside 2003 reprocessed by FAR 2007) OKL06 2D Seismic (Origin 2006)

Kifaru 3D Seismic (FAR 2012)

FALCON airborne gravity gradiometry and magnetics (FAR 2007)

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Onshore Plays: Basin-margin rollover

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Lamu Basin Kenya

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Miocene Reef prospects Cretaceous Clastic prospects Eocene Clastic prospects Other prospects/leads Eocene Fan prospects Discovery

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Maridadi-1B
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• Oil proven at both ends of the kitchen- 14 m oil column at Sunbird

• Continuous reefal trend

• Drill-ready prospects defined on 3D

• Massive upside (multi -billion barrel)

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Kenya Block L6 : Reef prospects

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Kifaru West Kifaru SW	Kifaru West Kifaru SW	NE	NE
	Kifaru West Kifaru
		Miocene reef play *prospective resources **
		Kifaru prospect	178 mmbbls
		Kifaru West prospect	130 mmbbls
		Other total	1,249 mmbbls
		Total	1,557 mmbbls
		Total net to FAR	934.2 mmbbls

*From FAR internal prospective resources 27 Feb 2013, best estimate, gross, unrisked prospective resources, 100% basis, oil only

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Senegal

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• Drilling commenced April 2014

• Partners are Cairn Energy (40%) and ConocoPhillips (35%)

• US$190M to be spent on drilling

• FAR received US$10M in cash

• Testing 1.5 billion barrels of oil in two wells, 225 million barrels net to FAR

• Size of total prize pool 3.5 billion barrels oil[] , 525 million barrels[] net to FAR

RUFISQUE, SANGOMAR & SANGOMAR DEEP OFFSHORE 16.7% paying interest, 15% beneficial interest Operator: Cairn Energy PLC

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*From FAR internal prospective resources 27 Feb 2013, best estimate, gross, unrisked prospective resources, 100% basis, oil only

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FAR in Senegal

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RUFISQUE, SANGOMAR & SANGOMAR DEEP OFFSHORE 16.7% paying interest, 15% beneficial interest Operator: Cairn Energy PLC

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Drilling Q2/3 2014 Farm out to Cairn & Drillable prospect Conoco 2013 Detailed exploration 3D seismic… 3D seismic 2007 Lead/prospect mapping Farm-in 2006

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Senegal prospectivity

• Petroleum system established – Rufisque Dome

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• World class source rocks

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TOC 6 – 34%
HI 450 - 650
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SNE-1
Play schematic
1150m WD
FAN-1
3500m TD
1437m WD
5300m TD
W E
Campanian - Maastrichtian
Santonian
Clastic Reservoir
Carbonate Reservoir
Source
Source
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Senonian Unconformity

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N
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Albian “Buried Hill” Play

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Albian “Buried Hill” Play

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Albian ”Buried Hill” Play

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Senonian
unconformity
surface
Inline 1356
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Central fan complex

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Central fan complex

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Central fan complex

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Senegal: North Fan prospect

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North Fan Prospect	North Fan Prospect
Best estimate unriskedprospective resource*
North Fan(H 82)	117 mmbbls
North Fan(H 85)	199 mmbbls
North Fan(H 88)	151 mmbbls
North Fan(H 89)	165 mmbbls

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West East
Approximate North
Fan well location
(FAN-1)
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• *From FAR internal prospective resources 27 Feb 2013, best estimate, gross, unrisked prospective resources, 100% basis, oil only

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Lupalupa prospect: Albian (SNE-1)

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Lupalupa prospect: Albian (SNE-1)

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Tertiary
Late Cretaceous shales
(Seal)
Intraformational Albian
shales (seal)
Aptian Carbonates
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Lupalupa prospect (SNE-1)

Lupalupa objective (Albian sands)

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L Prospect

FAR Most Likely unrisked Prospective Resource Lupalupa – Albian sands 154 mmbbls Boabab – Aptian carbonates 491 mmbbls

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Baobab Objective (Aptian carbonates)

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FAR in 2014

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Conclusions

• Only half the story • Great Deals……

• • Drilling Results……… ?

Regardless of outcomes

• Lots of Data rooms

• Lots of air miles, departure lounges, customs and immigration

• Lots of phone calls at night to different

• time zones

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