KAKWA
FAR is waiting on advice from the operator concerning the commercial merit (if any) of uphole zones in the Kakwa well located on Suncor acreage in the Kakwa area on the flank of the Peace River Arch Alberta, Canada.

The Kakwa well has been drilled to a total depth of 4,080 metres using Precision Rig 645 and has been logged. Preliminary observations suggest a well developed fracture system within the primary Wabamun objective that is significantly thicker than the offset key well location.

Initial testing of the Wabamun suggests the Kakwa well is connected to the offset well and has been partially drained and it now appears the well will be produced from one of several upper zones.

Good gas shows have been confirmed within secondary targets in the Cretaceous section and Middle Triassic intermediate section of the well. Logs confirm several of these zones are likely to be productive.

Waiting on advice concerning testing of behind pipe zones. Provided testing is successful the well will be completed for production with additional behind pipe zones in the well remaining for future testing and production.

The lease under this first test comprises 600 acres and forms part of a broader Area of Mutual Interest. The location is immediately adjacent to a highway and to a pipeline offering good logistics for early production in the event of success.

Participation in the initial test well earns FAR an option to participate in an additional much larger (50 BCF plus)named Karr, seismically controlled Wabamun prospect lying to the northeast of the initial test site on a lease comprising 800 acres. Several low risk lower potential Cretaceous targets have been identified on both blocks with up to four locations in each section.

Participants
Working interests in the Kakwa project are held as follows:
Choice Resources Corp (Operator) 40%
First Australian Resources Limited 15%
Reeder Energy, Dallas, Texas 15%
MBOE Inc, Dallas Texas 10%
Running Fox Resources Corp, Richmond, British Columbia 10%
Bolthouse Capital Corp, Vancouver, British Columbia 10%

KARR
Amplitude analysis of 3D data confirms the Triassic Halfway Formation and Wabamun Formation potential on this prospect. Potential is estimated in the 6-30 BCF range (but could be as large as 50 BCF) and is further supported by logs, samples and shows from the Pan Am 7-34 well.

The Karr prospect is analogous to the Berland River Gas Field (57 BCF). The Triassic Halfway Formation is productive at the analogous Karr Gas Field (12 BCF).

FAR has earned rights to the Karr prospect by drilling the Kakwa well and purchasing its 15% share of 3D seismic. Subject to farm-out efforts by Suncor and the acceptance of a capable and qualified operator, a 4,000 metre test well is planned at an estimated cost of around CAD$6 million.

FAR’s working interest is subject to Overriding Royalties retained by Suncor.