Quarterly Reports

AUSTRALIA

New Prospect Generation
Time interpretation in WA-254-P Part 1 using the recently acquired P99MC3D seismic data has been completed. Time maps at the following levels have been made:

• Top Tolonga
• Top Muderong
• Lower Muderong (Saffron Sand equivalent)
• Base Cretaceous
• Bajocian Unconformity
• Top North Rankin Formation

Several play types and leads/prospects have been identified and will be presented to the joint venture during the June quarter. Seismic interpretation in part 4 of the permit is being finalised using the Panaeus and Panaeus South 3-D datasets.

Argos Prospect
This prospect remains in drilling inventory with well timing yet to be determined.

Sage Oil Field
Further interpretation over the Sage accumulation was undertaken during the quarter with acoustic impedance inversion studies over the Saffron-Sage area. Acoustic inversion maps at the three reservoir intervals (Saffron, P. Burgeri and Base Cretaceous) have been made, however hydrocarbon distribution of the Sage Field cannot be reliably interpreted from the inversion results. These findings support the view that a further well is required to fully evaluate the discovery.

EP 395 - OFFSHORE CARNARVON BASIN - 11.25% INTEREST
(OPERATOR - TAP OIL NL)

Oil shows in the Boyd-1 well may have positive implications for the possibility of an updip oil accumulation at a location approximately 2 kilometres to the east of Boyd-1. Further work is being undertaken on this prospect with the objective of establishing a drill target later this year.

EP 397 - OFFSHORE CARNARVON BASIN - 33.3% INTEREST
(OPERATOR - TAP OIL NL)

Two Triassic aged prospects have been identified within EP 397, namely Banjo (formerly named Bunny) and Rupert. These prospects are at the same geological level as the Gipsy, Rose and Lee discoveries to the north, where drilling successes have been reported. Whilst structuring at this level is complex, the acquisition of the offshore Panaeus 99 MC3D survey over EP 397 should aid in further understanding and promotion of these prospects. The Operator is close to finalising the purchase of this data.

EP 104 - CANNING BASIN - 8% INTEREST (10% POINT TORMENT)
(OPERATOR - GULLIVER PRODUCTIONS PTY LTD)

A farmout offer has been received by the joint venture which proposes initial geological, geophysical and reservoir evaluation studies, which when completed, would then give the farminee the right to participate in the drilling of one well. The offer is currently being evaluated.

PAPUA NEW GUINEA

PPL 213 - PAPUAN BASIN - 8.67% INTEREST
(OPERATOR - SANTOS)

Following earlier regional interpretative studies designed to generate a ranking of prospects and leads, field mapping and spot sampling is planned during the April/May period prior to the seismic acquisition phase (early 2000). A bias toward oil prospectivity is favoured by the Joint Venture.

PPL 202 - PAPUAN BASIN - 12.5% INTEREST
(OPERATOR - SANTOS)

The Operator is continuing to assess both geological and geophysical data with an emphasis on identifying oil prone leads in close proximity to infrastructure.

UNITED STATES OF AMERICA

FAR principally targets natural gas in its programs. Spot natural gas pricing is very robust at present exceeding US$3.00 per thousand cubic feet.

South Drew Prospect, Ouachita Parish, Louisiana
The Silmon etal #1 well, the first well in the Company's year 2000 multi prospect program in Louisiana, was drilled during the quarter and is being completed as a gas producer.

Production pipe has been run in the well following confirmation, by logging, of gas pay in the primary Vaughn Cotton Valley objective between 9,568 and 9,580 feet and in the secondary D Sand, between 9,332 to 9,374 feet.

Construction of a 2,100 foot pipeline connecting into the nearest sale point and surface production equipment is complete. Gas production will follow the fraccing and completion of the well early May 2000.

The well is located within the South Drew Field in Ouachita Parish, Louisiana. South Drew Field was discovered in the late 1970's and produces from a strandline Cotton Valley sand covering the majority of North Louisiana. Subject to production performance, up to four 9,500-foot Cotton Valley test wells are planned. This play is similar to the Ada Field where FAR has participated in the drilling of several successful wells.

FAR has a 10 percent working interest in the Silmon #1 well. Other participants are USA based entities including the operator, Goodrich Petroleum Corporation (NYSE).

PRODUCTION

Oil sales during the quarter totalled 7,895 barrels for an average of 87 barrels of oil per day at an average price of US$26.75 per barrel before production taxes. Gas sales during the quarter totalled 66 million cubic feet for an average of 0.72 million cubic feet per day at an average price of US$2.40 per thousand cubic feet before production taxes

Yours faithfully,
FIRST AUSTRALIAN RESOURCES NL


MICHAEL EVANS
Chairman