Ann: Intention to Make Takeover Bid, page-31

What a terrible offer!!

Far has about 100M shares on issue.

Far has cash on hand as at 31/12/2021 of about A$57.5M (= (US$55.6M less US$15.3M owing on Bambo-1)/0.70 A$/US$

Far has contingent consideration due of A$78.6M (=US55M/0.70). Based on the current Brent forward curve FAR should receive the full US$55M in just over two years of production at SNE.

That is FAR present and future cash backing is about A$136M or $1.36 per share with the future consideration worth about A$0.78 of that amount.

FAR market capitalisation at A$0.45 per share is about A$45M up from A$36M on Friday.

FAR could commit to return the future contingent consideration to shareholder if/and when received ie A$0.78 per share at present.

FAR could also use some of its current funds on hand for an on market buyback:

At A$0.46 per share, FAR could repurchase 10% of its shares for just A$4.6M of its presently cash on hand of A$57.5M.

If FAR were to do this, the amount of contingent consideration payable per share would rise to A$0.87 per share and FAR would still have A$52.9M cash on hand.

A very opportunistic bid. Shareholders would be crazy to accept it.

Regards

SP