FAR : Target's Statement

For personal use only

23 February 2022

Company Announcements Office

ASX Limited

Level 4, North Tower, Rialto

525 Collins Street

Melbourne VIC 3000

By: E-lodgement

Target's Statement Reject Recommendation

Attached, as required by item 14 of section 633(1) of the Corporations Act, is a copy of the Target's Statement of FAR Limited (ASX: FAR) in response to the off-market takeover bid by Samuel Terry Asset Management Pty Ltd as trustee for Samuel Terry Absolute Return Active Fund (STAM) for all of the issued shares in FAR.

The FAR Directors unanimously recommend that FAR shareholders REJECT the inadequate and opportunistic offer that materially undervalues the FAR shares.

The Directors unanimously recommend that FAR Shareholders REJECT the STAM offer for the following reasons:

• The takeover offer price of 45 cents per FAR share is substantially less than the price at which FAR shares are trading on the ASX;
• The takeover offer price is materially lower than the underlying value of a FAR share; and
• The takeover offer is conditional and may not actually complete.

Shareholders are encouraged to read the Target's Statement in full when considering the FAR Directors' recommendation.

The Target's Statement has today been lodged with the Australian Securities & Investments Commission and sent to STAM. Dispatch of the Target's Statement to FAR shareholders will occur shortly.

Yours faithfully

FAR Limited

This announcement was authorised for release by the FAR Board of Directors.

For personal use only

TARGET'S STATEMENT

ISSUED BY

FAR LIMITED

ACN: 009 117 293

in response to the takeover bid made by

Samuel Terry Asset Management Pty Ltd as trustee for Samuel Terry

Absolute Return Active Fund for all of the ordinary shares in FAR

Limited

The Directors unanimously recommend

that FAR Shareholders

REJECT

the inadequateand opportunisticOffer that materially undervalues your FAR Shares by taking NO ACTION

Legal Adviser

Financial Adviser

This document contains important information and requires your immediate attention.

You should read this document in its entirety. If you are in any doubt as to how to deal with this document,

you should consult your legal, financial or other professional advisers as soon as possible.

For personal use only

Information about this Target's Statement

This document is a Target's Statement dated 23 February 2022 and is issued by FAR under Part 6.5 Division 3 of the Corporations Act. This Target's Statement sets out FAR's formal response to the Offer made by STAM under its Bidder's Statement.

A copy of this Target's Statement was lodged with ASIC and given to the ASX on 23 February 2022. Neither ASIC, ASX nor any of their respective officers take any responsibility for the content of this Target's Statement.

This Target's Statement does not take into account your investment objectives, financial situation or particular needs. It does not contain personal advice. The Directors of FAR encourage you to seek independent financial and taxation advice before making a decision whether or not to accept the Offer.

Forward looking statements

Some statements in this Target's Statement are in the nature of forward-looking statements. You should be aware that these statements are predictions only and are subject to inherent risks and uncertainties. Those risks and uncertainties include factors and risks specific to FAR as well as general economic conditions and conditions in the financial markets, exchange rates, interest rates and the regulatory environment, many of which are outside the control of FAR and its Directors. Actual events or results may differ materially from the events or results expressed or implied in any forward-looking statement.

None of FAR, any of its officers or any person named in this Target's Statement with their consent or anyone involved in the preparation of this Target's Statement makes any representation or warranty (either express or implied) as to the accuracy or likelihood of fulfilment of any forward looking statement or any events or results expressed or implied in any forward looking statement, except to the extent required by law. You are cautioned not to place undue reliance on those statements.

The forward-looking statements in this Target's Statement reflect views held only as at the date of this Target's Statement. FAR has no obligation to disseminate any updates or revisions to any statements to reflect any change in expectations in relation to those statements or any change in events, conditions or circumstances on which any of those statements are based unless it is required to do so under Division 4 of Part 6.5 of the Corporations Act to update or correct this Target's Statement (i.e. for certain matters that are material from the point of view of a Shareholder) or under its continuous disclosure obligations under the Corporations Act and the ASX Listing Rules.

Disclaimer as to information

The information on the Offer contained in this Target's Statement has been prepared by FAR using publicly available information (including information contained in the Bidder's Statement) and has not been independently verified by FAR. Accordingly, subject to the Corporations Act, FAR does not make any representation or warranty (express or implied) as to the accuracy or completeness of such information.

Privacy

FAR has collected your information from the register of Shareholders for the purpose of providing you with this Target's Statement. The type of information FAR has collected about you includes your name, contact details and information on details of your shareholding in FAR. Your information may be disclosed on a confidential basis to FAR's related bodies corporate and external service providers (such as the share registry of FAR and print and mail providers) and may be required to be disclosed to regulators such as ASIC and ASX. If you would like to obtain details of the information held about you by FAR, please contact Computershare Investor Services, whose contact details are set out in the Corporate Directory to this Target's Statement.

Defined terms

A number of defined terms are used in this Target's Statement. Unless the contrary intention appears, the context requires otherwise, or words are defined in section 7 of this Target's Statement, words and phrases in this Target's Statement have the same meaning and interpretation as in the Corporations Act.

ii

For personal use only

FAR maintains a website (https://www.far.com.au). Information contained in, or otherwise accessible through, this website does not form part of this Target's Statement. All references in this Target's Statement to the FAR website are inactive textual references and are for your information only.

Currency disclosures in this Target's Statement

All dollar amounts recoded in this Target's Statement are presented in Australian dollars unless specially denoted otherwise.

Shareholder information

Should FAR Shareholders have any queries about the Offer or this document, they should contact FAR by email on [e-mail] they can call the FAR company secretary on [phone].

iii

For personal use only

Chairman's Letter

23 February 2022

Dear FAR Shareholder,

TAKEOVER OFFER (OFFER) BY SAMUEL TERRY ASSET MANAGEMENT PTY LTD AS TRUSTEE FOR SAMUEL TERRY ABSOLUTE RETURN ACTIVE FUND (STAM)

STAM has made an off-market takeover offer for all of the FAR Shares at 45 cents cash per Share.

This document is our Target's Statement, which sets out the unanimous recommendation of your Directors to REJECTthe unsolicited, inadequate and opportunistic Offer.

Each of the Directors who holds FAR Shares intends to REJECTthe Offer in respect of their own holding of FAR Shares.

To REJECTthe Offer, simply ignore all communications from STAM and do nothing.

Your Directors believe there are three key reasons to REJECTthe Offer:

• The Offer price of 45 cents per FAR Share is substantially less than the current price at which FAR Shares are trading on the ASX;
• The Offer materially undervalues FAR given FAR's current cash, contingent payment of up to US$55 million from Woodside and FAR's exploration assets; and
• The Offer is conditional and may not actually complete.

This Target's Statement includes an independent valuation of the future contingent payment from Woodside to be made to FAR as part of the consideration received from the sale of FAR's interest in the Sangomar Oil Field Development to Woodside in 2021. FAR is investigating convening a shareholders meeting to consider a pro-rata distribution of rights to this contingent payment. We look forward to providing an update to shareholders in due course once this investigation is complete.

In recognition of FAR's activity following the sale of the Sangomar project and the return of 80 cents per Share in cash in 2021, FAR has continued to work to optimise value for shareholders, including creating savings by reducing personnel numbers and salary levels during 2021 and a move to smaller, lower cost office premises which will be completed later this month. Furthermore, as the Operator of the Gambian project interests, we are recommending a reduction to the project exploration spend for 2022 and are commencing a farm down of our interest in Blocks A2 and A5, seeking a carried interest on future work program, including a well in late 2023 and a contribution to FAR's past expenditure.