32 Cents - Bell Potter Broker Report Summary, page-3

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FAN - 1 well encounters over 29m of net oil bearing reservoir

FAR Limited (FAR) has made a major oil discovery, with a 15% working interest in the FAN - 1 deep water well in offshore Senegal, East Africa. Partners in FAN-1 are Cairn Energy Plc (Cairn, LSE –CNE, not rated) which is the Operator (40% interest); ConocoPhillips (35% interest) and Petrosen (the Senegal state oil company, 10% interest free carried). The well identified at least 29m of net oil bearing reservoir within a gross oil bearing interval of over 500m in a series of stacked deep water fans. No oil/water contacts were encountered, indicating the well did not intersect the thickest part of the oil bearing reservoirs. Samples of generally light crude oil (ranging from 28° API up to 41° API) were recovered from a number of oil samples recovered at surface.

Most significantly, the FAN-1 discovery demonstrates the presence of a proven hydrocarbon system. It validates and increases the potential of the numerous other nearby oil targets, one of which is about to be tested by the SNE-1 well.

Further analysis likely to upgrade size of FAN - 1 discovery

FAN-1 is an exploration well to test for the presence of a major hydrocarbon system. Initial indications are that the well has exceeded FAR’s pre-drill unrisked potential resource estimate of 900 million barrels (Mbbls) on 100% basis. Oil samples, core samples and wireline logs will be further analysed along with a correlation done of the results and the 3D seismic to enable a better understanding of the likely extent of the oil bearing sections. This analysis may result in the identification of additional oil pay intervals and potentially increase the oil resource volume. Detailed post-well analysis will also assist the planning of a follow-up appraisal and exploration program. The FAN-1 joint venture partners believe the discovery is potentially capable of supporting a stand-alone commercial oil development.

Back-to-back SNE-1 well spuds on nearby shelf edge play

FAR’s exploration rig will now resume drilling the nearby SNE-1 well. The top 1,900m of SNE-1 was drilled during maintenance at FAN-1. SNE-1 is targeting a shelf edge system where FAR estimates a potential resource of about 600Mbbls of oil in place (unrisked best estimate, 100% basis).

Investment thesis – Valuation $0.32/sh

With limited communication of the FAN - 1 discovery by well Operator, Cairn, the market has not fully appreciated the significance of this discovery. The limited response in Cairn’s share price supports this view. We value the discovery at $0.12 per share to FAR. Our equity adjusted base case valuation of FAR is $0.32 per share and our equity adjusted upside valuation is $0.69 per share. We see further upside to our Senegal valuations from the back – to - back drilling of the SNE - 1 well, leading to further de- risking of the other nearby prospects.

FAR is rated as Speculative because the company is engaged in high risk petroleum exploration and does not have any established earnings or cash flow.