OFFSHORE W For personal use only W POTENTIAL C A LASS … · 2011-09-01 · HY W EST A FRICA? From 1989 to 2009, Africa’s estimated oil reserves more than doubled to 127.7 billion

OFFSHORE WEST AFRICA:

WORLD CLASS OIL POTENTIAL

AFRICA DOWN UNDER CONFERENCE 2 SEPTEMBER 2011, PERTH

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DISCLAIMER This presentation has been prepared by FAR Limited (“FAR” or the “Company”). It should not be considered as an offer or

invitation to subscribe for or purchase any securities in the Company or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for securities in the Company will be entered into on the basis of this presentation. It is not to be distributed to third parties without the consent of FAR.

This presentation contains forward-looking statements and projected drilling schedules 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.

Management of 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. Management believes that the estimates are reasonable, but should not unduly be relied upon.

FAR makes no representation, warranty (express or implied), or assurance as to the completeness or accuracy of these projections and, accordingly, expresses no opinion or any other form of assurance regarding them. Management does not intend to publish updates or revisions of any forward-looking statements included in this document to reflect FAR’s circumstances after the date hereof or to reflect subsequent market analysis.

By its very nature exploration for oil and gas is a high risk business and is not suitable for certain investors. FAR securities are speculative. Potential investors should consult their stockbroker or financial advisor. 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.

You should not act or refrain from acting in reliance on this presentation material. This overview of FAR does not purport to be all inclusive or to contain all information which its recipients may require in order to make an informed assessment of the Company’s prospects. You should conduct your own investigation and perform your own analysis in order to satisfy yourself as to the accuracy and completeness of the information, statements and opinions contained in this presentation before making any investment decision.

Explore with www.far.com.au

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OVERVIEW OF FAR PORTFOLIO • FAR presently has the largest acreage holding of any ASX

listed entity in West Africa. – Senegal: 3 Blocks; 7,490km2 total licence area; 2,086km2 3D

seismic acquired; multiple prospects; 100% Working Interest. – Guinea-Bissau: 3 Blocks; 5,832 km2 total licence area; existing

Sinapa discovery; appraisal drilling likely 2012; 21.43% Working Interest.

– AGC Profond Block: Multiple undrilled prospects; 9,383km2 total licence area; 10.0% Working Interest.

• Early mover into West Africa acquiring interests on more favourable terms than FAR’s peers.

• Drilling planned in 2012 subject to farmouts/approvals. • Highly leveraged to exploration success in a frontier that is

experiencing a significant increase in exploration activity.


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ASX Code: FAR FAR is an elastic stock with high liquidity around events

Share Price (Aug10-Aug11) High: 0.175 Low: 0.029 Current: 0.032

Ordinary Shares on Issue: 1,245,401,164

Convertible Notes on Issue: 6,506,419

Options on Issue: 24,800,000

Cash on Hand: $26m

Receivable: $US6m Subject to Beibu Gulf sale conditions being met.

Market Capitalisation: $40m

Enterprise Value: $16.8m

FAR ATTRACTS INSTITUTIONAL INVESTMENT


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FAR continues to evaluate the potential value of a future AIM listing. F

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WHY WEST AFRICA?

From 1989 to 2009, Africa’s estimated oil reserves more than doubled to 127.7 billion barrels, equivalent to about 9.6% of the world’s total, according to BP.


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WHY WEST AFRICA? According to U.S. Geological Survey** estimates, Mauritania to northern Namibia may hold 71.7 billion barrels of undiscovered oil. With 7 licences, covering 23,170 km2, FAR is well placed to explore this potential. Explore with www.far.com.au

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** http://pubs.usgs.gov/bul/b2207-a/b2207-a.pdf

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http://pubs.usgs.gov/bul/b2207-a/b2207-a.pdf

WHY WEST AFRICA?

High potential basis – mega projects likely (source: Anadarko)


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Location of FAR’s licences.

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WEST AFRICAN PORTFOLIO: SENEGAL Senegal • FAR 100% Working Interest.1

• 3 Blocks; 7,490km2 total licence

area.

• 2,086km2 3D seismic has been acquired identifying several fans and a giant buried hills play.

1Subject to Ophir Energy plc’s option to acquire a 25% interest in the Senegal Licence areas.


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Senegal • Multiple prospects incl. carbonate

platform (mean STOOIP > 1 billion bbls) and Slope fans (mean STOOIP > 600 million bbls).

• FAR has given notice under the terms of the PSC to enter the second renewal period which commenced on 23 Nov 2010 and requires 1 well.

• Awaiting formal Decree. US$5m recoverable bond payable by FAR.

• Well planned subject to farm-out (50% available) and issue of Decree.1

WEST AFRICAN PORTFOLIO: SENEGAL


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1Subject to Ophir Energy plc’s option to acquire a 25% interest in the Senegal Licence areas.

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Guinea-Bissau • FAR 21.43% Working Interest.

• 3 Blocks (5,832km2) with Svenska as Operator.

• Licences include the ‘Sinapa’ oil discovery (30m of water, Mean STOOIP of 178 million bbls).

• Several large prospects including Sardinha prospect with Mean STOOIP of 518 million bbls.

• Completed a 1,600km2 3D seismic acquisition programme late 2010 – currently being processed.

• Appraisal and exploration drilling possible late 2012, subject to results of seismic processing.

WEST AFRICAN PORTFOLIO: GUINEA-BISSAU


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AGC Profond Block • FAR 10% Working Interest.

• Multiple undrilled prospects incl. Xalam(Mean STOOIP 618 million bbls).

• Block covers 9,838km2 in water depths from 50m to 3,500m.

• PSC in first renewal period -extended to 19 Sept 2012

• Future work will be directed at integrating the Kora-1 well results to better understand the potential of the remaining prospects.

WEST AFRICAN PORTFOLIO: AGC


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ADJACENT EXPLORATION: THE GAMBIA


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FAR Senegal Licence boundary

African Petroleum Corp Ltd’s Gambian play overlaps into FAR Senegal Licence. Well flagged by AOQ in 2012.

Senergy indicates total unrisked mean recoverable potential for 2 Gambian licences (A1 & A4) at 4.6 billion barrels.

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RECENT & PROPOSED WEST AFRICAN EXPLORATION


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Sierra Leone & Liberia Tullow

Jupiter Mercury

250mmboe Appraisal

2H 2011 2H 2011

LB15 650mmboe 2H 2011

AGC Ophir/FAR

Kora-1 2011 Sierra Leone & Liberia

Anadarko Multi-well program planned claiming 1:3 likely success rate with high potential.

Gambia & Liberia African Petroleum

Multiple well program 2011/12 following 3D acquisition in Liberia and Gambia

Guinea Hyperdynamics & Dana

3500 km2 3D survey. Transform margin play. First well (Sabu-1) October 2011

Liberia – Chevron Acquires 3 licences late 2010 with wells planned 2011. Potential worth $10B (source US embassy)

Senegal - FAR One Well 2012 Application lodged to enter drilling phase

No deep-water wells <2009 Discoveries Planned Wells (*does not indicate exact location)

Liberia – COPL LB13 drilling in phase 2 and 3

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WEST AFRICAN DEAL VALUES 2010/11


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• In 2010/11: – African Petroleum committed

to spending +US$60m for 60% of 2 Gambian PSC’s and vendor shares of AU$500m for 2 blocks in Liberia.

– Dana paid US$19.6m for 23% offshore Guinea.

– COPL paid US$85m for 1 block in Liberia.

– Chevron purported to have paid US$100m per licence in Liberia.

• By contrast, FAR has built a 7 licence West African portfolio for a carrying value of AUD~20m.

Offshore Magazine: West Africa 2009 Offshore Oil and Gas Concession Map

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PEER COMPARISON


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Based on information concerning contracted blocks between Senegal and Liberia available in the public domain as at 28 August 2011.

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FAR HAS RE-RATING POTENTIAL


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FAR has acquired 3D seismic data across its projects with unrisked prospect potential (P10 STOOIP) estimated at approx 8.6 Billion bbls gross.*

* Speculative estimated un-risked exploration potential not to be construed as commercial reserves or contingent reserves. The potential resources are all seismic prospects that have not been penetrated by any wells. These potential resources are undiscovered and projects are exploration plays. There is no certainty that any portion of the undiscovered resources will be discovered and that, if discovered, may not be economically viable or technically feasible to produce from any discovered resources.

Licences 7 5 1

Area (km2 gross) 23,160 13,663 24,993

3D Coverage 8,317 7,600 3,635

Market Valuation (31 Aug 2011)

Total Shares 1,245m 1,600m 124.3m

Market Price 0.032 0.65 USD4.47

Market Capitalisation AUDm $40 $1,040 $520

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CORPORATE SOCIAL RESPONSIBILITY


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As part of its role as a responsible corporation, FAR is dedicated to enacting policies and practices that are ethically, socially and environmentally sound.

Alongside FAR’s commitment to contractual profit sharing agreements with host countries, FAR invests in the development of vital facilities and services in Senegal and Guinea-Bissau.

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AFRICAN PORTFOLIO GROWTH • The current market necessitates a cautious approach to

investment. However, FAR’s strong balance sheet puts the Company in an excellent position to capitalise on growth opportunities and build on its established standing.

• FAR continues to evaluate offshore opportunities in the following regimes: – Ghana

– Benin – Angola – Gabon – Equatorial Guinea

– Mozambique – Kenya


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SUMMARY • FAR has an early mover advantage in West Africa where

exploration is set to intensify. • With a market capitalisation of around $40m and $26m in

cash, FAR is highly leveraged to: – Senegal (FAR 100% WI) with multiple world class prospects – Guinea-Bissau (FAR 21.4% WI), large acreage position

including existing ‘Sinapa’ oil discovery. – Further opportunities in the AGC Profond block, with the

Kora-1 results being integrated to better understand the potential of remaining prospects.

• FAR is attractive compared to market caps of peers given entry prices paid for frontier exploration in West Africa.

• A strong balance sheet in today’s weakened investment environment places FAR in a powerful position to pursue new opportunities


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Documents

OFFSHORE W For personal use only W POTENTIAL C A LASS … · 2011-09-01 · HY W EST A FRICA? From 1989 to 2009, Africa’s estimated oil reserves more than doubled to 127.7 billion