FAR reached agreement to sell its 5 percent interest in Beibu Gulf Block 22/12.

The sale price of US$8 million is to be paid in three tranches
1. US$2 million received during April 2009.
2. US$3 million upon approval of an Oilfield Development Program (“ODP”) or if commercial development of the project proceeds
3. US$3 million once the project has produced 1 million barrels of oil (gross).

The sale involves the disposal of FAR’s wholly owned subsidiary Oil Australia Pty Ltd being the entity that holds the Beibu Gulf Interests. The sale represents another milestone for FAR and will enable the company to focus on other opportunities that generate greater leverage.

Given the staged nature of the sale agreement, FAR will continue closely monitor the future development plans for the development of the Wei 6-12, Wei 6-12S, and Wei 12-8 Oil Fields. Presently ODP is likely during the 2nd half 2009.

Block 22/12 is situated approximately 60 km off the coast of China, northwest of Hainan Island. Water depths are shallow, ranging from, approximately, 10 metres to 40 metres. Within the Block there are several undeveloped oil accumulations.

The Block is supported by good infrastructure and lies adjacent to the 12/1-1 Oil Field. A pipeline to the Weizhou Island Oil Terminal, 10 km to the north, passes within 5 km. Block 22/12 is covered by 421 sq km 3D seismic acquired during 2002.

During May 2006 the Beibu Gulf consortium of Australian companies made a new discovery at Wei 6-12 South.

The consortium is now moving towards the development of this and other oil discoveries within the block.

On 27 September 2008, CNOOC confirmed that the Wei 6-12, Wei 6-12S, and Wei 12-8 Oil Fields have been declared development areas: a significant step in the process towards final development approval.