FAR Gets Government Nod to Farm-out Stake to Milio in Kenya Block L6

FAR has now completed three farm-out deals within the last 12 months and as a consequence is fully funded through three high impact exploration wells in the near future. Next month FAR expects to start drilling the first of two company making offshore wells in Senegal which are together targeting over 1.5 billion barrels of unrisked prospective resources. FAR’s farm in partners in Senegal are ConocoPhillips and Cairn Energy PLC”.

Farm in Agreement

Under the terms of the farm-in agreement between Flow Energy Pty Ltd, a wholly owned subsidiary of FAR (FAR), Pancontinental Oil & Gas NL (PCL), Afrex Ltd a subsidiary of PCL (Afrex), and Milio International Limited and Milio E&P Limited (Milio), each of FAR, PCL and Afrex agree, subject to certain conditions, to transfer certain rights in respect of the onshore area of Block L6.

The current participating interests in the Block L6 Production Sharing Contract (PSC) are FAR 60 percent, Afrex 24 percent and PCL 16 percent. When all conditions precedent are met, Milio will have a 60 percent interest in the onshore part of Block L6. FAR will retain a 24 percent interest in the onshore area and PCL and Afrex combined will retain a 16 percent interest. FAR will retain a 60 percent participating interest in the prospective offshore part of Block L6 and PCL and Afrex together will retain a 40 percent interest.

FAR remains Operator of the Block L6 Production Sharing Contract.

About Milio

Milio International is a prominent international petroleum logistics, marketing, trading, exploration and production company based in Dubai that is rapidly expanding its commercial footprint in East Africa. Milio is continuing to expand its strategic presence in Kenya through significant investment in a number of high impact projects. Milio holds a controlling interest in Block L20 which is located immediately to the west of Block L6.

Block L6 Kenya

FAR has an interest in 2 Kenya permits Block L6 and Block L9. Both are located in the Lamu Basin offshore and onshore Kenya, north of recent world scale, natural gas discoveries totalling around 100 trillion cubic feet (Tcf), off the coasts of Mozambique and Tanzania. Growing interest in the Lamu Basin’s exploration potential is reflected in the fact that up to 7 wells are planned to be drilled over the next 12 to 18 months. Drilling results in the Lamu basin to date have been encouraging.

In the offshore section of the L6 permit FAR (currently 60 percent interest and operator) has acquired and processed an extensive airborne gravity gradiometry and magnetic survey coupled with a 2D seismic program. In 2012 the joint venture completed 300 square miles (778 square kilometers) of 3D seismic in Block L6 where FAR was the first company to acquire 3D seismic over the highly prospective offshore Micoene reef play currently being drilled by BG Group with the Sunbird-1 well in Block L10A. The results of this well are expected to be known by the end of 1Q 2014.