Ann: Annual Report 2017, page-2

- The attractive opportunity that presented itself when our partner in the Senegal joint venture, ConocoPhillips, agreed to sell its 35% share at a price of approximately US$2.20/bbl of 2C resource to Woodside Energy at a price that was surprisingly low remains more so in today’s market. The sale triggered the rights of partners to pre-empt and, given ConocoPhillips refused FAR access to all the required information to evaluate the opportunity to pre-empt within the allotted timeframe, FAR issued ConocoPhillips with a dispute notice pursuant to the terms of the Joint Operating Agreement. This dispute was not resolved amicably and in June, FAR commenced arbitration proceedings in the International Court of Arbitration to bring the matter to resolution. We have received much shareholder enquiry about the progress of the ICC case and at this time, report that the tribunal is awaiting the appointment of the Chair, after which proceedings can commence. The ICC has a policy of concluding arbitration cases in under 6 months so we are hopeful of resolution before the end of the year and will release material information regarding the case as it comes to light. I am satisfied that we have positioned ourselves comprehensively from a strategic standpoint and feel confident of our position going forward as we seek declaratory relief from the ICC. It is well worth remembering that the outcome of the court process will not affect FAR’s current rights or position.

- We anticipate that the market will remove the inbuilt price discount for risk around the SNE development plan approval and associated funding risk and that, if successful in the Samo-1 well, it will be a gamechanger for shareholders in FAR. The second half of the year is shaping up to be very exciting for us all.

- FAN South-1 encountered hydrocarbon bearing reservoirs and oil samples were obtained with preliminary analysis indicating 31° API oil quality. SNE North-1 encountered oil and gas in the primary objective and oil in the deeper secondary objective, in a separate accumulation to the SNE field. A full set of oil, water and gas samples were recovered with preliminary analysis indicating a slightly lighter oil type of 35° API. The highquality oil and multiple oil columns not seen in the SNE Field demonstrate that the geology is more complex as we move to the north along the shelf edge play. Following these two additional discoveries, FAR has revised the inventory of undrilled prospectivity offshore Senegal, and whilst there are no plans for drilling these prospects in 2018, they account for considerable upside potential in the acreage that is yet to be realised.