STRATEGY

•FOGL seeks to add shareholder value by pursuing an aggressive exploration programme in its licences to the south and east of the Falkland Islands. Exploration drilling will continue in the deep water areas of FOGL’s licences in the first half of 2012. If successful, this drilling could lead to the development of a new hydrocarbon province in the South Atlantic.

Next Phase of drilling

In the first half of 2012 FOGL is planning to drill two wells in the deep water area of its licences.
FOGL has contracted the Leiv Eiriksson rig to undertake this drilling programme. The rig is due to arrive in the Falklands in early 2012 when it will initially drill two wells for Borders and Southern Plc (B&S), before commencing the FOGL drilling programme. The B&S wells are to be drilled on the Darwin and Stebbing prospects. The results of these wells will be of interest to FOGL, because we have similar plays and prospects within the southern part of our licence area.

The first well to be drilled in the FOGL programme will be on the Loligo prospect. A number of options exist for the second well, including potentially a well on Scotia, a prospect within the Mid Cretaceous Fan Play. The final decision on which prospect will be targeted by the second well will be guided by the results from Loligo.

Funding

As at 7 September 2011 FOGL's available funds, including the BHP Billiton settlement, were $150.8 million. The Company is debt free.


2012 Drilling Programme

The Leiv Eiriksson a harsh environment rig has been drilling wells offshore Greenland for Cairn Energy. That campaign is expected to finish by the end of November 2011 after which the rig will head south to the Falkland Islands. The rig will first drill two wells (about 90 days drilling) for Borders and Southern Plc (B&S) before moving on to the FOGL programme. The transit time from Greenland is expected to be approximately 60 days.

A great deal of work has gone into the planning of the FOGL drilling campaign and over the preceding years a large amount of data has had to be collected to so that the drilling can take place.

Seismic data was acquired from 2004 to 2007 and again in 2011, CSEM in 2007, site surveys in 2009 and 2011 and metocean data, from permanent current meters, in 2009/10. Well planning essentially started in 2009 with the drilling of three, 200m deep, geotechnical boreholes. This data helped with the planning of the shallow section of the Toroa well (FI 61/05-1) and has been extensively used in the planning of the deep water programme.

The first well in the FOGL programme will be on the giant Loligo prospect. A second well will also be drilled by FOGL using the Leiv Eiriksson and site surveys have been acquired over the following prospects: The Nimrod Complex and the Vinson prospect in the Tertiary Channel Play, the Scotia or Hero prospects in the Mid Cretaceous Fan Play and the Inflexible or Endeavour prospect in the Springhill Sandstone Play. Options that are currently being considered depend upon the results of the first well on Loligo. The final play in the FOGL acreage is in the Fold Belt in the south west of the FOGL acreage. This play is being tested by B&S at their Stebbing prospect. Similar features exist within the FOGL acreage and the results of the well will be closely monitored. In addition the B&S, Darwin well is targeting a tilted fault block which again shows great similarities with several prospects in the FOGL portfolio (Inflexible, Thulla etc.). Depending on the results of Darwin FOGL may consider a well on Inflexible as the second well in the programme.

FOGL’s main focus is on the two younger plays, the Tertiary Channel and the Mid Cretaceous Fan play. FOGL has been working on the Mid Cretaceous play for some time but it was only in late 2009, when the seismic data had been fully reprocessed, that it became clear that this major new play was viable. The play is analogous to the ones being successfully targeted in West Africa (the Tullow Jubilee field in Ghana and other discoveries along that margin) and the general geology, depositional setting and even the AVO response (Class II response over Scotia and Hero) are remarkably similar. The two main prospects, Scotia and Hero, both contain prospective resources in excess of 1 billion bbls. One of the key features that makes this play so attractive is that the reservoir sands sit directly above the mature Aptian oil source rocks which were sampled in the DSDP wells to the East of the FOGL acreage.

2012 DRLLING TARGET LOLIGO

The shallowest target alone covers an area of over 600sqkm. The Loligo prospect was first mapped in 2006 and has been re-mapped and re analysed several times since then. It is a large stratigraphic trap which is supported by a very consistent Class III AVO response on the seismic data. It is an ‘easy to map’ anomaly which stands out clearly above the background seismic responses when compared to the entire basin. In addition, it sits directly above an old high which used to separate the Southern basin (Fitzroy sub-basin) from the Northern basin (Volunteer sub-basin). This old high seems to be acting as a focus for hydrocarbon migration from deeply buried source rocks in each of the sub basins.

Beneath the southern part of Loligo several other prospects within the Tertiary Channel play, overlap and may be penetrated by one carefully located well. The deeper prospects (each covering an area similar to Loligo) have been called Trigg and the Three Bears. Together these prospects are called the Loligo Complex. The prospective resources (recoverable oil) associated with the Loligo complex, are in excess of 4 billion bbls of oil or over 25tcf of gas.




FOGL is focused exclusively on offshore oil and gas exploration in the Falkland Islands.

We are pursuing an aggressive exploration programme that could lead to the development of a new petroleum province in the South Atlantic. The joint venture operations have now moved into the drilling phase.
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Most prospects in 2,000 – 4,500 feet water depth (610 – 1372m)

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Target horizons: 6,000 – 13,000 feet below sea bed lever (1829 – 3962m)

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Falklands weather is similar to West of Shetland

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Remote location but there were no major issues during 1998 drilling campaign

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Anchored semi-submersible or drillship for exploration drilling

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Tried and tested technology for developments



Falkland Oil and Gas Limited Licence area.




FINANCIAL SUMMARY http://www.fogl.com/fogl/en/Investors/performance

FOGL HOME http://www.fogl.com/fogl/en/home

http://www.stockopedia.co.uk/content/falkland-oil-and-gas-2012-its-time-63024/

refreshing 9% rise in the sp to 27p today

And with decent volume to.

Petition to stop short selling.

Well worth a read.

http://epetitions.direct.gov.uk/petitions/62851

Someone on another site is a bit concerned that we don't know the rigs name, but so what as long as the rig with no name (yet) is as successful as the man with no name (Clint Eastwood) we have nothing to worry about.

A fist full of dollars would be very welcome, make my day Fogl!

On another site, someone is concerned re the recent selling and I also find it strange.

Surely people invest in oil explorers in the belief that they will find oil, obvious I know but it has to be said.

Fogl have oil due to a share in Sealion, they have 5 wells fully funded, they are in partnership with a couple of big boys, they have rig contracts, they have 5 wells drilled with 4 having found gas concentrate, they have around $93 million in bank (accepting that is mostly counted for re the drilling campaign).

With an sp of 27.50p making a mrkt cap of £141 mill how can this possibly be a sell, always of course allowing for sellers to make short term gains, although I bought in for the long game that all oil explorers are in.

That long game is now far closer to the end than the beginning.

If you were looking to invest in a oil explorer and looked at Fogl, what's not to like, weighing up the risk v reward the current sp has to be a bargain.

Whilst not being the most patient person (wife says I make Victor Meldrew look like the patron saint of patience) I am not that concerned re the none release of the 3D data.

I appreciate the release of said data is long awaited by us the investors, but as there is no urgent requirement on behalf of the company to decide were optimum drilling's in the area covered by this survey, then if they decide to wait till the last minute in order to pin point the most precise place to drill then I would sooner wait than risk them missing the sweet spot.

I also feel that they have no hidden agenda re this, as I can not see they would gain anything in delaying the results good or bad as they have to be released pre drill no matter what, also they longer the delay the harder it is to keep the results from leaking out.

I would think the delay is purely because they are as they have said, still being analysed.

Looking at the size of the area that is being analysed (12,000 sq.km) I would just love to know how many separate scans they have to look at.

I would think that the number is at least in the high 6 figures which in order to do a thorough job will take time, presumably because the detail is much more defined that the previous 2D data.

As to the number of scans, yes it is a complete guess, but judging by the time it took to complete the survey I would think that its on the low side.

3D update or not.

Whilst accepting that there may be good reasons for not releasing the full results of the 3D surveys I will be annoyed (but not surprised) if these results are not released by the stated time of end of year.

So many times we see AIM listed companies stating time lines and then just allowing them to pass without updating the market.

I might be jumping the gun as we still have a few days to go but as said I am not expecting any such release.

They should either release the results or at least issue an RNS stating the reason why they are not releasing said results.

If year end passes without a update RNS no doubt the belief of up PI's will be that either the results are bad, which I very much doubt, or more likely that its the treat PI's like mushroom syndrome yet again.

So come on FOGL, how about an end of year Xmas present!

As we all know the oil industry of supply and demand is going through a tremulous time partly caused by demand slipping and the role that shale gas is playing in the USA, but what we are mainly seeing is a power struggle between the OPEC and none OPEC countries, again a fact I think we all accept.

Whilst accepting that within a couple of years, demand will be pushing supply, I tend to look at the situation in a simpler way when it comes to were we are headed.

This to my mind is like a supermarket price war obviously on a far bigger scale, and we all know how they end up, once the dust has settled and the smaller struggle for a profit outfits have gone to the wall, the average price ends up higher.

With the FI fields being new and not due to come on line for at least a couple of years, I feel that Fogl will be well placed (pun intended) to take advantage of the higher price of oil that's to bound to return.

Only a month ago, the vast majority of 'oil expert analysts' were stating that the price of oil per barrel was likely to stay below £100 for at least a couple of years and yet today the majority of these analysts are stating that the price drop has been overdone.

Also due to the fact that investment has been cut back, when oil output is required to be increased, there will be a shortage due to lack of supply.

Many now expect the price per barrel to go back above £100 before year end, with some predicting a price of £150 to £200 within 3 to 4 years, again due to cut backs in investment.

A nice timeline for Fogl.

http://www.moneyam.com/action/news/showArticle?id=4987418

Erik Raude spud news due any day now....interesting year ahead for FOGL & RKH.

Hi Chav,

Have you see this link.

http://www.fogl.com/fogl/en/Investors/results/presentations

I have and as usual it's all looks very good....just have to see how lucky the drill bit is!

Ay, no matter what the 3D analysis shows, an element of luck is required.

RNS out re spud.

I once saw a dance of the seven veils, the drilling of the seven fans looks far more interesting!

Well discovery RNS, better than expected.

And the sp slumps.....?....will I ever understand the market ?.....

Hi RF,

I think its because no matter how good the results and they are good, people often expect everything to be 100% success at all levels, something that is nigh impossible, especially in the oil exploration business.

Just need to rise another 50% (historic holding) and I will break even! With the current state of the oil market, if we get anywhere that I will be out. Any chance of rebasing the above charts say to a 100p max price so we can see the share price movement better? thanks H

StockMarketWire.com
Falkland Oil and Gas has confirmed an oil and gas discovery at well 14/15b-5 off the Falkland Islands.

The well, which is located on licence PL004b (FOGL 40% interest), discovered 27.5 metres of net oil-bearing reservoir and 17.5 metres of net gas-bearing reservoir. The well penetrated multiple targets in the Cretaceous F2 and F3 formations with a total net pay of 45 metres. The pay is primarily located within two F2 sands:

· The Hector sand, which contains 17.5 metres of net gas pay.

· The Zebedee sand, which contains 25.0 metres of net oil pay. No oil-water contact was observed in the Zebedee reservoir.

The reservoir in both the Hector and Zebedee intervals is of good quality and the results are better than FOGL's pre-drill expectations.

Oil was also encountered in a 5 metre sand (2.5 metres of net oil pay), lying below Hector which may be a southern extension of the Beverley sand encountered in the 14/15b-4 well. In addition, a 3 metre sand lying below the Zebedee sand, containing good oil shows, is thought to be the southerly extension of the Sea Lion Main sand.

Pressure measurements taken in the Zebedee interval plot on the same gradient as those observed in the oil leg of the Sea Lion field. It is likely therefore, that Zebedee reservoir is in pressure communication with, and has the same oil-water contact as Sea Lion. Good oil shows were recorded in a number of the deeper F3 targets, but at this location the sands are not well developed.

FOGL says it is encouraged by the positive results of the well.

The Zebedee reservoir is better developed than anticipated in FOGL's reservoir models and this will positively impact resource estimates. The Hector reservoir, which has not been drilled previously, has been proven to have very good properties. In addition to the gas discovered in Hector in the well, the flank of the Hector reservoir may have potential for additional oil resources.

FOGL will now evaluate these results and their positive impact on potential hydrocarbon resources. We will also initiate an independent third party assessment, the results of which will be published in due course.

The well will now be plugged and abandoned as a successful exploration well. The Eirik Raude rig will then drill the first exploration test on the Elaine/Isobel fan complex in the southern part of the North Falkland Basin with the Isobel Deep well.

The results of this well are expected in late April 2015 and a further announcement will be made upon spudding on the well.

Chief executive Tim Bushell said: "This is an excellent result and one that adds significantly to the proven hydrocarbon resources of licence PL004b and the greater Sea Lion area. This well further confirms the extension of the Sea Lion discovery and associated reservoirs into PL004b, which have now been demonstrated to contain a significant proportion of the total field resources.

"FOGL looks forward to continuing to work with its partners to progress development of the substantial oil and gas resources within PL004b."