Far Pre-Trade 16th October, page-51

Hi CV

1. Originally I had +/- 20% volatility allowance but later reduced that to 15% based on further progressive share price data, but have been thinking maybe I should have left it at 20%. These volatility allowance ranges are not included in the extracted table, only on the main sheet examples.

2. I thought about auto increasing the COS's of the other plays in the better than expected success case for SNE/Bellatrix, but decided that FAR had already increased them once based on the initial SNE results and that was probably enough to be going on with. It is true the market might get excited about it at the time, but nearology doesn't seem enough in the oil game: examples are Cliffhead (ROC) and AWE (Tui) both having only limited success in follow up programs to their initial discoveries. Our hope is that with the better than expected source rocks this time it will be different.

3. I am not slowly coming round, I have always been there as I decided that the forward program was relatively low risk given all the positive factors and that of all oil stocks it might therefore be an invest proposition which might, by continued progress limit the downside in the event of further oil price falls. Plus the added T/O possibility made investment sense to me.

4. Having said that, if you accept the input to my tables as reasonable, then at current US$50 oil prices, confirmation by the first 3 wells of a likely 330mb total at SNE is already reflected in the current share price - I believe we do need more for the market to sit up and take notice at current oil prices. FAR says we will get more

pj