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Gold/Mining/Energy
First Australian Resources -

An SI Board Since February 2001

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Emcee: richard badauskas	Type: Unmoderated

Introduction Compact

First Australian Resources (Australian Stock code FAR, U.S. ADR code FARYY) An international microcap junior producer with interests in permits in onshore Louisiana and Texas, Papua New Guinea Highlands and offshore North West Shelf of Western Australia. FAR has a current market cap of US$10M and is cash flow positive from its U.S. production interests (December revenues appox US$600,000 from one million cubic feet of gas and eighty five barrels of oil per day).

Far has offices in Perth, Western Australia and runs its U.S. operations from Denver. The U.S. permit interests were bought some years ago when prices were very low. Development of the properties was hindered by low pricing of natural gas and low sales revenues. The current high prices for NG has created the opportunity to undetake a very active drilling program on many of the properties. In fact two wells have just spudded and a third will shortly with up to fourteen wells planned in the U.S. and possibly three more on its international permits over the next twelve months.

The U.S. properties are:

Clear Branch, Northern Louisiana. FAR owns a 9.37% interest in this permit which has potential to contain +50 billion cubic feet of gas. Hunt Oil produced over 50 billion cubic feet in the 1970's from the Hosston sands from widely spaced wells. The current operator Rio Bravo (Key Energy KEG-NYSE is a partner here) has drilled Terry Ewing #1 to seek production from both the Hosston sands and the deeper Cotton Valley sands present in the well. The presence of the gas in the Cotton Valley greatly increases the potential of the permit. Terry Ewing#1 ran into technical problems but currently is producing 1.5 million cubic feet of gas per day (the well initially produced a flare that reached tree top level but drilling muds used in the Hosston sands "choked" off the gas (see photo referred to later. A workover rig is planned to try to increase production). The new well Willamette #2 will drill "unbalanced" using different drilling mud and aim only at the Hosston sands where historic production was around 3 million cubic feet a day. Currently 8 wells are planned to be drilled on the property.

South Drew, Louisiana. FAR interest 15% Goodrich Petroleum operator. Police Jury #1 has spudded in an area where a well drilled last year is producing 1 million cubic feet and 50 barrels of oil per day. A four well program is currently planned prior to mid year.

Lake Long,Mississippi River Delta Southern Louisiana. FAR interest 15%. This is probably the most interesting area to be drilled in terms of single well potential for FAR. The State Lease 328 No7 well should spud within the next few days. The well is located in a very prolific oil and gas province that has produced 300 billion cubic feet of gas and 25 million barrels of oil. Thirteen Miocene sands will be tested including a 15 foot gas zone drilled in the 1940's.

Eagle Prospect, San Jouaquin Basin California. FAR has a 12.5% interest. Potential here is for 40 million barrels of oil and 88 billion cubic feet of gas. FAR drilled nearby in the 1980's and struck both oil and gas. A well is planned mid-year as the current farm-out is now completed.

FAR is doing wildcat drilling with Apache (APA-NYSE) as the operator on WA254P FAR 10.7%. Sage#1 was drlled in 1999 and struck oil considered by Apache to be a small find of about 4 million barrels of oil. The junior partners hope that Apache will drill a step out. Numerous other plays have been defined in the area i.e. Collier, that may have the potential to host +10-20 million barrel potential. Apache has just put on stream its nearby Legendre field of 40 million barrels.

EP397 FAR 33%. Also in an area that is surrounded by discoveries. TAP oil is the operator and farm-out agreements are underway with potential to drill Banjo prospect which is a "stacked pay zone play" with +20 million barrel potential.

FAR also EP395 also has potential as do the PNG permits FAR 10% with Santos as operator. The PNG permits are real elephant country. Located in the Highlands over 1.2 billion barrels of oil have ben discovered with additional trillions of cubic feet of gas on adjoining permits in the same geological trend. A well will be drilled in PNG by 2002 and possibly EP395 within the next twelve months.

FAR is seeking to list in the U.S. as its multi well program develops. For more information please visit aircommunications.net FAR is actively looking for brokers at the moment to support its proposed listing and possible funding.

FAR has a 12(g) exemption and is filing with the SEC. The ADR program is supported by HSBC Bank. Code for the ADR's is FARYY.

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