FAR : Unaudited Financial Report for YE Dec 31 2020

30 March 2021

Unaudited Financial Report for Year Ended 31 December 2020

FAR Ltd (ASX:FAR) today releases its unaudited financial accounts for the year ended 31 December 2020, attached to this announcement.

FAR is utilising the ASIC Relief and ASX Class Waiver for extended reporting deadlines and the dispatch of annual reports and will release its Annual Report including audited accounts and its Corporate Governance Statement by the extended deadline of 30 April 2021. FAR will make an immediate update announcement if there is a material difference between the unaudited accounts and the audited accounts.

A FAR shareholders meeting is being held on 15 April 2021 to consider approving the sale of FAR's interest in the RSSD project to Woodside. The outcome of this meeting will assist in clarifying the position in this regard.

ASX suspended FAR's shares from trading in September 2020 following the inclusion of a disclaimer of audit review opinion in the Company's audited Half Year Report as at 30 June 2020. ASX has advised FAR that the trading suspension will only be lifted once there is no disclaimer of review opinion expressed in the Company's audited accounts.

This announcement has been approved for release by the FAR Board.

ABN 41 009 117 293

UNAUDITED

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

Expressed in United States dollars

(USD, US$ or $) unless otherwise stated.

Forward looking statements - This document may include forward looking statements. Forward looking statements include, are not necessarily limited to, statements concerning FAR's planned operation program and other statements that are not historic facts. When used in this document, the words such as "could", "plan", "estimate", "expect", "intend", "may", "potential", "should" and similar expressions are forward looking statements. Although FAR Ltd believes its expectations reflected in these are reasonable, such statements involve risks and uncertainties, and no assurance can be given that actual results will be consistent with these forward- looking statements. The entity confirms that it is not aware of any new information or data that materially affects the information included in this announcement and that all material assumptions and technical parameters underpinning this announcement continue to apply and have not materially changed.

CONTENTS

OPERATING RESULTS AND FINANCIAL REVIEW	1
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME	3
CONSOLIDATED STATEMENT OF FINANCIAL POSITION	4
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	5
CONSOLIDATED STATEMENT OF CASH FLOWS	6
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	7
1.	GENERAL INFORMATION	7
2.	ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS	7
3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	7
4.	CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY	10
5.	SEGMENT INFORMATION	11
6.	OTHER INCOME	12
7.	LOSS FOR THE YEAR	12
8.	EXPECTED CREDIT LOSSES	13
9.	INCOME TAXES	13
10.	TRADE AND OTHER RECEIVABLES	15
11.	OTHER FINANCIAL ASSETS	15
12.	DISCONTINUED OPERATIONS	15
13.	PROPERTY, PLANT AND EQUIPMENT	17
14.	EXPLORATION AND EVALUATION ASSETS	18
15.	OIL AND GAS PROPERTIES	19
16.	TRADE AND OTHER PAYABLES	19
17.	PROVISIONS	20
18.	RIGHT-OF-USE ASSETS AND LEASE LIABILTIES	21
19.	ISSUED CAPITAL	23
20.	RESERVES	23
21.	EARNINGS PER SHARE	24
22.	CONTINGENT LIABILITIES AND CONTINGENT ASSETS	24
23.	JOINT OPERATIONS	25
24.	SUBSIDIARIES	27
25.	DEED OF CROSS GUARANTEE	28
26.	NOTES TO THE CASHFLOW STATEMENT	30
27.	FINANCIAL AND RISK MANAGEMENT	31
28.	SHARE-BASED PAYMENTS	40
29.	KEY MANAGEMENT PERSONNEL COMPENSATION	42
30.	RELATED PARTY DISCLOSURES	42
31.	PARENT ENTITY	43
32.	REMUNERATION OF AUDITORS	44
33.	DIVIDENDS	44
34.	SUBSEQUENT EVENTS	44
SHAREHOLDER INFORMATION	45
CORPORATE DIRECTORY	46

OPERATING RESULTS

The net loss of the Group for the year ended 31 December 2020 after income tax was US$75,694,730 (31 Dec 2019: US$21,144,093)

FINANCIAL PERFORMANCE
	31 Dec 2020	31 Dec 2019	Change
	Unaudited	Audited
Profit & loss	US$	US$	%
Revenue	291,364	370,160	(21.3)
Expenses	(15,143,042)	(18,592,933)	(17.0)
Loss from discontinued operations	(60,551,688)	(2,921,320)	1,972
			8
Loss for the period	(75,694,730)	(21,144,093)	258.0
Basic EPS from continuing operations (US cents per share)	(0.16)	(0.30)	(48.7)
Basic EPS from continuing & discontinued operations (US cents per share)	(0.78)	(0.35)	121.2
Financial position
Net assets	157,671,163	129,305,580	21.9
Cash balance	25,933,571	13,752,652	88.9
Cash flows
Operating cash flow	(17,517,971)	(19,280,647)	(9.1)
Investing cash flow	(71,671,439)	(16,035,813)	346.9
Financing cash flow	100,401,916	29,731,205	237.7

Financial result

The Group reported a loss for the year ended 31 December 2020 of $75,694,730 (31 Dec 2019: $21,144,093 loss) which includes a loss from discontinuing operations of $60,551,688 relating to the Senegal asset which the Group has decided to sell. Included in the Senegal project discontinuing operations amount are a remeasurement loss on the Senegal RSSD asset of $55,760,120, exploration expenditure of $1,661,285 and financing costs of $3,097,479 including break fees and default cash call interest.

The lower loss from continuing operations for the year of $15,143,042 compared with the prior year loss from continuing operations of $18,222,773 was mainly due to lower exploration expenditure of $10,648,685 (31 Dec 2019 - $13,241,193) primarily due to lower Gambia and Guinea-Bissau project joint operation costs as a result of the impacts of COVID-19.

Financial position

Net assets increased during the year by $28,365,583 to $157,671,163 primarily due to the increased investment in oil and gas properties relating to the development of the Senegal RSSD asset which was subsequently transferred to assets held for sale, described further below.

At the beginning of the year the Senegal RSSD exploration and evaluation assets of $116,995,489 were transferred to oil and gas properties upon the approval of the Sangomar Field Development in January 2020. During the year $97,354,795 of Senegal development expenditure was incurred and a loss on remeasurement of the Senegal asset of $55,760,120 was deducted and subsequently $158,590,164 was transferred from oil and gas properties to assets held for sale to reflect the Group's decision to sell the asset. Assets held for sale at year end including inventory were $161,361,902 and liabilities associated with those assets held for sale were $34,341,844 resulting in net assets of the disposal group of $127,018,181. This implied value is based on the Woodside sale and purchase agreement terms including the upfront purchase price of $45M plus working capital from 1 January 2020 to 31 December 2020 and excludes any contingent payments.

Whilst exploration and evaluation assets reduced significantly during the year to $5,794,184 due to the substantial reallocation of the Senegal RSSD asset described above, there were additions of $3,391,959 including Gambia well planning and preparation costs and long lead items of US$2,836,147 and Guinea-Bissau well long lead items of $555,812.

Cash at year end was $25,933,571 (31 Dec 2019: $13,752,652) with no external borrowings at 31 December 2020. During the year there were significant cash inflows and outflows. Cash reserves from the prior year together with proceeds of $107,545,810 received from the equity raise in January 2020 were largely utilised to make payments for the Senegal oil and gas development assets of $69,016,270 and exploration and evaluation assets and expenses of $15,680,321, mainly relating to the Gambia project. Other outflows included share issue cost payments incurred on the equity raise of $3,647,907 and payment of financing costs primarily relating to break fees incurred in respect to the Senegal project financing of $3,097,634.

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