hartleys, page-6

Trader1 some more details regarding Hartleys valuation ....

VALUATION

FAR is underpinned by its current and future projected cash position, as well as its US assets. The main potential of the Company lies with its Senegal acreage, with several possible scenarios:

1. Shell decides not to drill, pays FAR US$3.4m. FAR would retain 90% ownership of the block and would continue to market but risk would be significantly increased. Share price underpinned by 4cps cash and US assets worth 5cps. May trade between 4-5cps, depending on oil and gas prices.

2. CSEM data indicates oil in reservoir and Shell decide to drill. Share price shoud increase based on potential value of target. For example, pre-drill trading in Karoon Gas Ltd (“KAR”) suggests that the ratio may be a factor of ~12.5% of this value. If the target were 300 million barrels of recoverable oil, the potential value for FAR would be ~A$900m, which would imply a share price of 20cps pre-drill.

a. Oil is discovered and FAR is worth >150cps
b. No oil, see scenario 1.

We believe the chances that the CSEM will indicate the presence of oil and Shell will decide to drill are better than 50/50. On this basis, we believe the Company should be trading close to the midpoint between the low valuation of 4cps and the high pre drill valuation of 20cps, or around 10-12cps.