First Australian Resources to raise $12.4m

First Australian Resources Ltd has reached an in-principle agreement with Hartleys Ltd to raise $12.4 million to assist with its exploration program.

The raising will be by way of the placement of 95 million shares to predominately British, North American, Asian and domestic institutional clients of Hartleys.

The latest raising now sees the company fully funded to pursue its exploration program, the highlights of which include:

* A 3D seismic survey to be conducted on the Deep Water Offshore Senegal blocks to further refine the prospects and leads (including large turbidite fans) identified on reprocessed 2D seismic by JV partner Hunt Oil, a number of which are capable of hosting several hundreds of millions of barrels of oil;
* Multiple wells to be drilled in the Gulf of Mexico including Offshore Galveston Bay (rig contracted for 15 July 2006) and Lake Long Deep;
* Two gas plays at Kakwa (approaching target depth) and Clear Hills in Alberta, Canada, where gas has already been discovered in both projects; and
* Offshore China where the Joint Venture awaits confirmation of multiple oil and gas zones recorded while drilling the Wei 6-12-South wildcat well.

THE FULL ASX ANNOUNCEMENT AND MEDIA RELEASE APPEARS BELOW.


FAR RAISES $12.4 MILLION FOR WORLD CLASS EXPLORATION PROGRAM

The Directors of First Australian Resources Limited are pleased to announce that the Company has
reached an in-principle agreement with Hartleys Limited to raise $12.4 million through the placement
of 95,000,000 shares, predominately to British, North American, Asian and domestic institutional
clients of Hartleys Limited.

Together with the $13.5 million on hand as at 31 March 2006, the Company is now fully funded for
what will be a world class exploration program emanating from its Houston office, the highlights of
which include:

* A 3D seismic survey to be conducted on the Deep Water Offshore Senegal blocks to further
refine the prospects and leads (including large turbidite fans) identified on reprocessed 2D
seismic by JV partner Hunt Oil, a number of which are capable of hosting several hundreds of
millions of barrels of oil;
* Multiple wells to be drilled in the Gulf of Mexico including Offshore Galveston Bay (rig
contracted for 15 July 2006) and Lake Long Deep;
* Two gas plays at Kakwa (approaching target depth) and Clear Hills in Alberta, Canada,
where gas has already been discovered in both projects; and
* Offshore China where the Joint Venture awaits confirmation of multiple oil and gas zones
recorded while drilling the Wei 6-12-South wildcat well.

The Directors would like to extend a welcome to new shareholders of the company and thank Hartleys
Limited for their continuing support. The company is delighted with the participation in the capital
raising of some of the most highly renowned institutional oil and gas investors.

The shares will be allotted subject to shareholder approval being obtained at a General Meeting to be
held on 9 June 2006.

Commenting on the proposed placement, Executive Chairman Michael Evans said:

"FAR has now secured a class of shareholder that can match the company's growth ambitions. The
ability of FAR to attract this level of support reflects not only its maturing status as an oil and gas
producer and explorer but also the high caliber of its exploration portfolio, particularly West Africa
and North America. "

This announcement will lift the present trading halt in FAR securities.

Further information on FAR's drilling program and prospects is available in regular updates provided
to the ASX and at FAR's website on www.far.com.au