FAR Limited ($FAR)

Good morning all. My name is Patrick O'Connor, the company's Chair, and it is my pleasure to welcome you to this Annual General Meeting of FAR Limited. This meeting is being held virtually. The company Secretary has advised that a quorum is present. And as the time is now 11:00 a.m., I declare the meeting open. I'm joined through this webcast today by my fellow directors: Mr. Robert Kaye, a Non-Executive Director; and Andrew Lilley, a Non-Executive Director. I would also like to welcome our Company Secretary, Sonya Tissera; and Andrew Johnson, a representative of the company's Auditors Moore Australia. Our share registry representatives are also in attendance. The Notice of Meeting was made available to shareholders on 24th April 2026, and copies are available for you on the share registry's online voting site and on the company's ASX market announcements platform. I will take the notice of meeting and explanatory statement as read. As previously advised, this is a virtual meeting. Shareholders are able to participate and view a live webcast of the meeting, ask questions and cast direct votes at the appropriate time whilst the meeting is in progress. The format of today's meeting will be a brief Chair address by myself, consideration of the formal business on today's agenda, followed by questions in relation to items of business or in relation to the management of the company. I will now outline the procedures for today's meeting. The online platform is now open for shareholder questions, and I encourage you to submit as early as possible. To ask a question, please follow the instructions as displayed on the screen. Please note, we can submit questions from now on, I will not address them until the relevant time in the meeting. Please also note that your questions may be moderated or if multiple questions are received amalgamated together. For those shareholders who wish to ask a verbal question, an audio question facility is available during the meeting. To use this service, please pause the broadcast on Computershare platform and dial in via phone using the dial-in number displayed under the broadcast window. You'll be granted access and will listen to the meeting until you are introduced to ask your question. Visitors are reminded that whilst we welcome you to this meeting, it is a shareholders' meeting, and you may not make comment or ask questions. Voting today will be conducted by way of a poll on all items of the business. Instructions on how to vote through the Computershare platform are displayed on the screen. To provide everyone an opportunity to vote and in case anyone cannot stay for the whole meeting, I will now formally open the poll on all resolutions. I will give you a warning before I move to close voting. You can change your vote up until the time I declare voting closed. I'll now provide a Chair address on the operations of the business. The 2025 year saw the company continue to execute its strategy of delivering value to shareholders through the ordinary realization of the Woodside contingent payment and the prudent return of surplus capital. Key activities during the year, together with material developments since the end of the year are summarized as follows. Turning to the Woodside contingent payment. As part of the consideration for the sale of its interest in the RSSD project in Senegal to Woodside Energy in 2021, FAR received rights to a contingent payment with a maximum value of USD 55 million. In May 2025, FAR received a provisional 2024 contingent payment of USD 11.5 million, calculated by reference to Sangomar sales volume for the calendar year 2024. Shareholders subsequently approved a capital return of $0.08 per share at the 2025 Annual General Meeting, returning approximately AUD 7.4 million to shareholders. Woodside advised the ASX on 28th January 2026 that Sangomar produced approximately 29.7 million barrels equivalent of crude in 2025 with sales of approximately 28.5 million barrels equivalent. Based on the sales volume, FAR estimated the contingent payment payable in respect of the calendar year 2025 would be approximately $23.7 million. On 16th March 2026, FAR announced it had reached agreement with Woodside for a provisional 2025 contingent payment of $23.7 million, and that amount was subsequently received by FAR on 12th May 2026. As previously disclosed, both the 2024 and 2025 provisional payments remain subject to a reconciliation of the underlying oil entitlement volumes with each joint venture participant and the Senegalese Ministry of Energy Petroleum and Mines. Following that reconciliation process, Woodside or FAR will be required to settle any difference between the final and provisional amounts. Following the receipt of the 2025 payment, the maximum future contingent payment potentially received by FAR is approximately $19.8 million. The contingent payment arrangements terminate on the earliest of 31 December '27, 3 years from first oil sold, excluding periods of 0 production or the aggregate contingent payment reaching USD 55 million. Woodside's first quarter 2026 report released to the ASX on 29 April 2026, advised that the Sangomar Field achieved an average daily production rate of 99 million barrels per day during the quarter with a reliability of 99.9% and that the reservoir continues to perform better than expected. Woodside also indicated that it expects production rates to decline over the balance of 2026. Turning to the Woodside claim agreement. As announced to the ASX on 28th May 2025, Woodside advised a claim of $6,029,899 under the sale and purchase agreement relating to the sale by far of its interest in the RSSD project in 2021. The claim arose following a final decision by the Senegalese Ministry of Energy Petroleum and Mines that Woodside is unable to recover certain petroleum expenditure not directly linked to exploration activities. In respect of which FAR had an indemnity obligation capped at about USD 6.8 million. On 22 December '25, FAR announced it had entered into an agreement with Woodside for the settlement of the claim. On 30 December 2025, FAR paid Woodside the full amount of the claim. Importantly, the agreement preserves FAR's right to reimbursement if prior to 31 December 2030, Woodside is ultimately able to recover the relevant petroleum expenditure from the Senegalese Ministry of Energy Petroleum and Mines. Turning to capital management. At the 2025 Annual General Meeting held 30 May 2025, shareholders approved a capital return of $0.08 per share, returning approximately AUD 7.4 million to shareholders. The payment was completed on 12 June. Following the receipt of the 2025 contingent payment, directors consider FAR has surplus capital, which should be returned to shareholders. Accordingly, shareholder approval has been sought at today's meeting for a proposed capital return of $0.35 a share, returning approximately AUD 32.3 million to shareholders. If approved, the company intends to implement a capital return in accordance with the timetable as set out in the Notice of Meeting. Consistent with the approach adopted in previous capital returns conducted in '21, '23 and '25, the company is seeking a class ruling from the Australian tax office confirming the proposed capital return will not be treated as a dividend for taxation purposes. The company will release the class ruling to the ASX if and when received. Directors continue to adopt a conservative capital management approach, ensuring that sufficient funds are retained to meet the company's ongoing operating obligations and any potential reconciliation outcomes under the Woodside arrangements. The company has continued to focus on the realization or rationalization of corporate overheads and has successfully operated on a contract service provider model with no employees. Total expenditure during 2025, comprising employee benefits, corporate and administration costs reduced compared to the prior year, reflecting the Board's ongoing strategy to maintain operating costs at the minimum level necessary to discharge the company's obligation as an ASX-listed entity. Turning to outlook. FAR's strategic focus remains the orderly realization of the remaining Woodside contingent payment entitlements and the timely return of surplus capital to shareholders. Based on current expectations regarding Sangomar production performance and the prevailing oil price assumptions, it may be reasonably expected, all other things remaining equal, that the remaining maximum USD 19.8 million of the contingent payment entitlement could be potentially realized during calendar year 2026, with the corresponding payment expected to receive by FAR in the first half of calendar year 2027. Subject to the receipt of any final contingent payment amount and the reconciliation of the underlying oil entitlement volumes with Woodside and the Senegalese Ministry of Energy Petroleum and Mines, the Board presently intends to propose a further capital return to shareholders in respect of any remaining surplus capital. Coincident with that process, the Board may also begin considering new opportunities for the company. Any such opportunity may result in a change in the strategic direction and control of the company. The Board will continue to keep shareholders informed of any material developments in accordance with the company's continuous disclosure obligations. I thank my fellow directors for their continued contribution during 2025 and shareholders for their ongoing support and patience as we continue the realization of value from the Woodside contingent payment and return capital to shareholders. Thank you. I'll now turn to the business of the meeting. I confirm that Michael Stretton of our share registry, Computershare, has been appointed to act as returning officer for the purpose of conducting and determining the results of the poll. Where proxies have been properly nominated to be at the Chairman's discretion, those proxies will be cast in favor of today's resolutions. Valid proxies for each resolution will be displayed on the screen. I now move to the first item of business, which is to receive and consider the company's financial statements, directors' report and auditor's report for the financial year ended 31 December 2025. These items are contained in our 2025 annual report, a copy of which was made available to shareholders on 18 March 2026 and is available on the ASX markets announcements platform. There is no formal resolution to be put to the meeting in relation to the adoption of the 2025 annual report. However, I will respond to questions or comments from shareholders in relation to the annual report later in the meeting. Andrew Johnson from the company's Auditors Moore Australia, is available to respond to any questions or comments relating to the audit or the financial statements. We will take questions on -- questions about or any comments you have in relation to the management of the company. No written questions to the auditor were received by the cutoff date 5 business days before this meeting. As this matter does not require a vote, we will now move on to the first resolution. I turn to Resolution 1, which is to consider the adoption of the remuneration report for the financial year ended 31 December 2025. The remuneration report is as set out in the directors' report in our 2025 annual report. The vote on this resolution is advisory only and does not bind the directors or the company. Please see valid proxies received for this resolution as displayed on your screen. I move that shareholders consider and if thought fit, pass this as an ordinary resolution. I now turn to Resolution 2, which pertains to the reelection of Mr. Andrew Lilley as a Director of the company. Andrew's bio is outlined in the Notice of Meeting. Please see valid proxies received for this resolution as displayed on your screen. I move that shareholders consider and if thought fit, pass this as an ordinary resolution. I will now proceed to the next item of business. I refer to the final item of business, Resolution 3, which relates to the capital return as set out in the Notice of Meeting. Please see the valid proxies received for this resolution as displayed on your screen. I move that shareholders consider and, if thought fit, pass this as an ordinary resolution. While shareholders can vote, I will turn to questions that we have received from shareholders on the various avenues they can.

One question from Mr. Stephen Mayne was in relation to running an unmarketable parcel offer after the $0.35 capital. At this stage, we haven't considered that. We will look to next year's distribution and then depending on opportunities for the company, the Board can consider an unmarketable parcel, but the intention is to return the next distribution as a capital return. A further question from Stephen Mayne related to the number of staff. We have no direct staff other than the Board members, and then all services are provided by contract service providers. So there's no change in that seen over the next 12 months. That may be revisited at a time of a new business activity being undertaken by the company. There was another question from Stephen Mayne in relation to changes to the capital gains tax announced in the federal budget. We do not see those having any impact on the current capital distribution and not aware of any impact on what we're proposing for the final capital distribution if that was to occur next year. But as legislation changes and events unfold, we will continue to monitor and assess developments, but we don't see it having an impact. There was -- as part of that question in relation to corporate tax, the company's primary businesses have been related to overseas, and we have met all of our tax obligations as they've been due in the various countries we've operated in. But we haven't generated profits in Australia through the history of the company that's related -- that's required the payment of tax to the Australian federal government. And then there was a final question from Stephen Mayne in relation to -- this is a webcast. We will be publishing after the meeting the voting results once they're determined by Computershare and listing that on the ASX market announcements platform that we don't intend to be releasing a transcript or a copy of the audio of the webcast. I believe there's another question from a shareholder. We when received the capital -- the contingent payment amount around 12 May, that was converted to the Australian dollars. It approximated the Australian dollars that we're distributing, subject to costs and other normal admin costs, the surplus will be added to the working capital carried forward, but there's not a material difference in the received amount and the distribution amount. The 30 June quarter report and the 30 June half year report will be an appropriate time to sort of to add all the corporate costs together. But we see that we have adequate working capital to see through us until next year when we look forward to receiving the next contingent payment. Sonya, are there any other questions received from shareholders?

Thank you, Chair. I confirm we have received no further questions.

On that basis, I will provide shareholders an additional 30 seconds for the poll voting to be completed. So we'll just give shareholders a brief moment to finish their voting. [Voting]

Thank you. As the additional time is now up, I now declare the poll closed. Once poll results have been tallied by Computershare, we will announce the results later today on the ASX market announcement platform. The company has not received notice of any other business, and as such, that concludes the formal business of today's meeting. I declare the meeting closed. I thank you for your attendance, and we look forward to your continued support.