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.
•
Most prospects in 2,000 – 4,500 feet water depth (610 – 1372m)

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

•
Falklands weather is similar to West of Shetland

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

•
Anchored semi-submersible or drillship for exploration drilling

•
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/

Nor are they likely to for a very long time!

i never said that - lol! ...... however, it is far from impossible that the sp will come back to earth with a thump in due course

Well its Not going anywhere (the oil), and its making me money short term !! :)

Any thoughts on where the sp might finish?
170p seems to be about as far as it wants to go at the moment & I am thinking of taking profit when it next tests this level.
The chart isn't really much help as the sp is well above the 200 & 50 DMA.
My gut feeling is that once the "Oil major" announcement is made that the sp may settle back to normal (70p - 90p range) levels until drilling starts.

harry ... with sp only a few coppers below your arbitray 170, why don't you bank your profit now on at least part of your holding?

The usual excuse, cynic. Greed!
I recently sold AQP at 1420 & it promptly went to 1800p!!!
I am trying to squeeze everything I can out of my FOGL holding, but I do agree that your suggest is the sensible thing to do.

and had AQP tumbled to 1300 or 1200, then what?

Quite!!!

Falkland Oil and Gas Limited
02 October 2007


Falkland Oil and Gas Limited

Farm-out Agreement with BHP Billiton


Falkland Oil and Gas Limited ('FOGL') is pleased to announce that it has entered
into a farm-out agreement with a subsidiary of BHP Billiton, the world's largest
diversified resources company, over FOGL's 2002 and 2004 licences to the South
and East of the Falkland Islands.


Highlights:


O Under the agreement a minimum of two exploration wells will be drilled in the
next 3 years

O The farm-out agreement applies to FOGL's entire exploration acreage in the
Falklands

O BHP Billiton will acquire a 40% interest, with an option to increase its
interest up to 65%, and will take over the operatorship of the licences

O FOGL retains a substantial stake in the licences

O BHP Billiton pays FOGL US$10 million in reimbursement of certain historical
costs

O New licence terms have been agreed with the Falkland Islands Government

O The entry of BHP Billiton, a company with extensive deepwater exploration
experience, into our licences confirms our view of the significant petroleum
potential of the South and East Falkland Basins.


Details of the agreement


Under the terms of the agreement BHP Billiton will acquire a 40% interest in the
2002 and 2004 licences and will also, take over the operatorship of the
licences, effective January 2008. In return BHP Billiton will pay four thirds of
40% of the costs of the forward work programme, including the drilling of two
exploration wells and all other associated work to the completion of this
drilling work. In addition, BHP Billiton will pay FOGL US$10 million in
relation to certain costs already incurred by the company. BHP Billiton also has
the option to further increase its interest in the licences up to 65%. Under
this option arrangement, BHP Billiton will pay four thirds of its share of the
costs of the forward work programme up to the completion of the drilling of two
exploration wells, in relation to their additional interest and also, pay FOGL
an additional contribution to historic costs on a pro-rata basis. This option
will expire on 27 November 2007.


Following discussions with the Falkland Islands Government it has been agreed to
extend by 3 years the term of the first phases of the 2002 and 2004 licences, so
that they now expire in December 2010. As part of this change to the licence
terms a partial relinquishment of the 2004 licences will be made at the end of
2007. The Falkland Islands Government has also recently extended the second
phase of the 'open door' licences to five years. The second phase of the
licences will therefore, run from January 2011 to December 2015. The existing
work commitments of the licences remain unchanged.

Tim Bushell, Chief Executive of FOGL commented:

'This is a landmark deal for FOGL. The introduction of a major company as a
farm-in partner has been a key strategic objective over the last 18 months and
we are delighted to welcome a partner of BHP Billiton's calibre and expertise.


The entry of BHP Billiton as operator provides us with their expertise in
drilling in deepwater and sensitive environments, which combined with their
access to rigs will continue the exploration programme and lead to the drilling
of the first exploration wells in our licences.


BHP Billiton's commitment confirms our view that the South and East Falkland
basins are prospective and have high potential for the discovery of significant
volumes of oil and gas.


We are now entering a very exciting phase for FOGL and the Falkland Islands. The
results of our recent exploration programme and the introduction of BHP Billiton
represent a significant step in realising the potential of the region.'


Steve O'Rourke, President, Exploration, BHP Billiton Petroleum, said:


'We believe this substantial Falklands acreage will be a good addition to BHP
Billiton Petroleum's global portfolio and we look forward to working with our
partner to pursue this under explored area. With our strong focus on growth, we
now hold a significant interest in this high potential basin and will utilize
the talent of our team to safely execute an exploration program in the Falkland
Islands.'


2 October 2007

Enquiries:


FOGL 020 7563 1260
Tim Bushell, Chief Executive

KBC Peel Hunt (Nominated Adviser) 020 7418 8900
Jonathan Marren / Matt Goode

College Hill 020 7457 2020
Nick Elwes / Paddy Blewer


www.fogl.com

patience paid off !! my 180 here we come :)

Yes Smiler o: it's jumped nicely on the news. What about Borders & Southern?? I reckon it could be next in that region.

Yes all should see a tic up !

HOUSTON, Oct 02, 2007 (BUSINESS WIRE) -- BBL | charts | news | PowerRating -- BHP Billiton announced today that it has acquired an interest in 14 exploration and production licenses offshore the Falkland Islands in the South Atlantic. The Company signed contracts with Falkland Oil and Gas Limited (FOGL) for rights to explore and, if successful, eventually produce oil and gas from the East Falkland Basin located off the southern and eastern coast of the Falkland Islands.

BHP Billiton holds a 40 per cent interest in the acreage and is the designated operator. Falkland Oil and Gas Limited holds the remaining 60 percent interest. The production licenses cover approximately 18 million acres and are located in water depths ranging from approximately 656 to 6,570 feet (approximately 200 to 2,000 meters).

"We believe this substantial Falklands acreage will be a good addition to BHP Billiton Petroleum's global portfolio and we look forward to working with our partner to pursue this under explored area," said Steve O'Rourke, President, Exploration, BHP Billiton Petroleum. "With our strong focus on growth, we now hold a significant interest in this high potential basin and will utilise the talent of our team to safely execute an exploration program in the Falkland Islands

Falkland Oil to Drill Two Wells in BHP Billiton Pact (Update1)

By Tom Cahill

Oct. 2 (Bloomberg) -- Falkland Oil and Gas Ltd. plans to drill at least two exploration wells off the Falkland Islands in an agreement with BHP Billiton Ltd., the largest mining company.

BHP Billiton will acquire at least a 40 percent interest in two of Falkland's licenses with an option to increase its stake to 65 percent by agreeing to help finance the drilling program.

While the British Geological Service estimates that as many as 60 billion barrels of oil may be generated in the North Falkland Basin, exploration has been limited because of a lack of drilling rigs. Desire Petroleum Plc, another explorer in the Falklands, proposed a consortium to lure rigs to the remote islands, which the U.K. kept after a war in 1982 with Argentina.

``This finally cracks the rig problem,'' Tim Bushell, chief executive of Falkland Islands Oil and Gas, said in a telephone interview from the Falklands. ``It's a huge game changer for us and possibly the other guys as well. We were just not big enough to attract a rig and BHP has the scale and size to bring them in.''

BHP has two drilling rigs already on long-term contracts that it could choose to use, Bushell said. He estimated costs for drilling wells in waters about 1,000 meters deep could cost as much as $35 million per well, not counting the transport cost to get a drill ship on site.

Bushell said its ``top ten'' prospects in the region all have at least 500 million barrels of reserves with the largest estimated at 3 billion barrels.

Under terms of the agreement, BHP would cover 53.3 percent of those costs for a 40 percent stake and as much as 86.5 percent if it exercises its option for a 65 percent stake.

To contact the reporter on this story: Tom Cahill in London through the London newsroom tcahill@bloomberg.net

Congratulations Smiler, looks like FOGL have come good for you.

the reaction to the news looks surprisingly muted .... perhaps it was already well discounted and sp will now trickle backwards, which is likely anyway now the anticipation has been realised.

Well managed to get 178.50 to sell, may get a a small tic up tomorrow but i would think you will see it tic backwards for sure longer term untill drilling as you say Cynic & should be opportunities to top up then. pleased with this one (still hold some) :) GCM next !!!

not convinced that there is now any hurry to get into this stock .... though it may well have a fine future, that will not be known for 12 and maybe 24 months

Agree Cynic I have held some back just in case you never know ! + what will be the price of oil in 12/24 months ?

Cynic what a " wet blanket" you are.This is great news for FOGL and the people of the Falkland Islands after all they have been through, I wish both of them every success.

how romantic, but what has that rhubarb got to do with the direction that sp will now take?
indeed, there is even an argument for shorting over a brief period as the hot money cashes in