Gas Shows Discovered in Lake Long Well

On day 22 of the program, the SL 328 #1 well, located at the Lake Long Field, Lafourche Parish, South Louisiana, is drilling ahead in 11 and 7/8 inch hole at 10,869 feet, using Parker Barge Rig 55-B. The well is drilling according to plan as reflected on the time versus depth graph attached to this report.

While drilling the A Sand interval between 9,320 and 9,380 feet, background gas increased to 385 units associated with an increase in drill rate penetration. While drilling the E Sand interval between 10,080 and 10,110 feet, background gas increased to 585 units associated with an increase in drill rate penetration. Whilst these sands were not specifically targeted in the current drilling, they are productive elsewhere in the field and will be further evaluated when electric logs are run prior to setting intermediate casing at approximately 11,820 feet.

Provided the well remains on schedule, the top of the Krumbhaar interval should be penetrated within the next 48 hours after which the well will be cased prior to drilling into the Upper, Middle and Lower Hollywood objectives below 11,816 feet (true vertical depth). An LWD tool (log while drilling) has been added to enable real time evaluation of intervals drilled as the well progresses toward its primary objective, the deep Cib Op interval.

The SL 328 #1 well is a proposed 15,500 foot (true vertical depth) test of the Lake Long Deep Prospect. The well is being operated by Palace Operation Company, of Tulsa, Oklahoma under a turnkey contract with Applied Drilling Technology Inc, a GlobalSantaFe Company.

The SL 328 #1 well is being directionally drilled to test the Cib. Op. interval below 13,900 feet. The well has also been designed to evaluate shallower objectives at the 6900 Sand, Krumbhaar and Upper, Middle and Lower Hollywood intervals. The well is likely to take between 70 and 90 days.

Based on the Kent Bayou Field analogue, sand pay thicknesses exceeding 500 feet are possible at the Cib. Op. interval at Lake Long. The field operator, Kriti Exploration Inc has estimated the potential reserves of the prospect to be in the order of 766 billion cubic feet of gas equivalent.

With Henry Hub gas prices at US$5.31 per thousand cubic feet, a prospect of this magnitude has the potential to generate a significant future cash flow stream with a meaningful impact on a company the size of FAR.

FAR is participating in the Lake Long Deep Test well by paying 5 percent of the well (before completion) reducing to a working interest of 4.09375 percent (after completion). All working interests are subject to State and other minor royalties. Other participants are non listed entities, Kriti Exploration Inc and Palace Exploration Company both based in North America.

To date, FAR has participated in four wells within the field, all of which have resulted in commercial production. Existing facilities within Lake Long will enable early sales into the central production system with Columbia gas and Amoco being the ultimate product purchasers, although field capacity would need to be upgraded in the event of a large gas discovery.