.

What a load of ................................

euhhh...dots ?........

It does look like there is more oil out there......who knows ?....same as the north sea...you keep on drilling and one day ; you can hit the jackpot......when they discovered Brent in the north sea, from what I gather the riggers thought the oil was coming from the rig itself until it dawned on them....it shows they did not expect a discovery...so....on to the next well and this is not too far away from Sealion as the crow flies.......(just loving this drilling campaign to bits).....

Scotia well.


As of this moment in time the rig has about 16 miles to go to get to the Scotia location.

Spud will therefore be this week for Scotia.

Scotia is

50 deg 23' 54.50" South
53 deg 37' 11.61" West

Water depth is 1762 meters (thats your mudline)
TD is estimated at 5198 meters.

Total drilling depth is therefore 3436 meters.

Based on Loligo progress they should be at TD and stopping drilling in around 45 days to 55 days range - total well operations should be in the 60 to 65 days range (which includes wireline work and P&A and rig on the move)

Scotia is targeting oil, believed to be around API 30 if found as per pre-drill prognosis (gas signatures have also been seen at this location so gas or gas/condensate is also possible).

.......The Mid Cretaceous Fan Play is well developed in the northern part of the FOGL acreage. This geological play was developed when the Falklands were still attached to the southern part of the African continent. A large amount of sediment, sourced from the continent and the Falklands Plateau area to the north, built up in near shore shallow seas. When a drop in sea level occurred, these sediments were deeply eroded and the reworked sands were shed far offshore into deep water. Several prospects have recently been mapped in this play in the northern licences. These are Hersillia, Scotia and Hero.

The Scotia prospect is located in quadrant 31 (PL027).Although the area had been mapped on seismic data before, it was only when the entire data set was reprocessed in 2008-09 that Scotia stood out as an attractive prospect.A distinctive sandy unit on laps the base of the old shelf. The formation dips to the south, which controls the spill point of the prospect, but it relies upon the pinchout of the sands in other directions to define the trap.

The prospect has a strong element of structural control and is supported by a conformable AVO anomaly. The primary target is in Albian age sands (about 100 million years old). The source rock for the oil sits just below this target and FOGL anticipates oil generation in the area. However, FOGL also recognises gas signatures on the seismic data and so either ‘phase’ is strictly possible. The Scotia well location sits in 1810 metres of water. The target is about 3,290 metres below the sea bed and the TD of the well is estimated to be at 3,440 metres below the sea bed. The Scotia well location lies approximately 330 kilometres east of Stanley...........


The Scotia well is targeting P50 recoverable barrels of just over 1 billion
(so thats over 3 billion barrels in place (for those that like OIP figures and not recoverable barrels), FOGL have 40% share and so net to FOGL on a P50 basis would be 400 million recoverable barrels (net to FOGL would be about the same size as Sea Lion in total for PMO/RKH)

The drilling program is running at approx 980K US$ per day (based on BOR Darwin costs of 96 million dollars for 98 days rig use) for everything needed.

Loligo cost would be 55 days @ 980K US$ per day of which 75% is the cost to FOGL, so Loligo will have cost FOGL circa 40.43m US$.

This saving in time/money should help push the leftover cash up from 212m US$ stated at Noble farm in to circa 220m US$ post Scotia (it no delays) or circa 43 pence per share.

The Scotia well is being paid for 60% by Noble, 25% by Edison and 15% by FOGL.

Estimated well operations time of 65 days and on the move would work out the net cost to FOGL for the Scotia well on a 15% contribution basis of about 9.6m US$.

Any time saving here will have minimal impact of cash going forward owing to FOGL only contributing 15% costs on this well for their 40% share of it.

Total drilling cost for the 2012 campaign should work out :

Loligo 40.43m US$
Scotia 9.6m US$
Mob/Demob 15m US$ (FOGL share)

Total cost for 2012 drilling campaign of circa 65m US$.


End of 2012 drilling campaign should be circa 220m US$ left over cash (circa 43p a share cash at 1.6 exchange rate)

According to Noble/FOGL the 2013 Seismic will cost net 65m US$ and FOGL share will be circa 30m US$. Admin costs circa 3m US$ in 2013.

So 220m less 30m for seismic less 3m for admin will leave FOGL entering 2014 with circa 187m US$ cash.

Well costs going forward will be circa (net to FOGL).

45m US$ per Loligo/Nimrod/Garrodia Tertiary well) (75% net FOGL).
28m US$ per well anywhere else (40% net FOGL).
With a circa 15m US$ mob/demob charge (or 7.5m if BOR also use the same rig)

FOGL could drill 3 Loligo drills in 2014, or 5 Mid-Cretaceous wells in 2014, which is why you see them say the plan is 3 to 4 wells - likely, imo, 1 Loligo appraisal in 2014 and 3 Mid-Cretaceous.

Once the 3D is done and all processed I would expect FOGL to farm down the Tertiary at Loligo/Nimrod/Garrodia in late 2013 to Noble as well to the same level (eg give up 35% and go down to 40% net to FOGL) and allow them to gain additional cash from past costs and a free carry on a lump of the next wells.

Such a move will give Noble incentive to farm in, and allow FOGL to be in a position to undertake say a 10 well drilling program (from late 2014) without the need for any fund raising.


I have some time this week I hope, to do a full write up on Loligo results, if not this week then next.

Good write-up Proselenes, as always.

What happened to the rig that Nobile was tendering for.........Something you posted a number of weeks ago......... Or have I misunderstood?

As far as I know they are still tendering for it.

Gas prices are low at the moment, especially in the US, because of a glut of gas following the shale boom. Oil is more highly prized. Also, the Falkland Islands are 11,000 miles from Japan, the world’s biggest consumer of liquefied natural gas (LNG), so the latest find is not exactly close to market.

Shares in all the companies exploring around the Falklands have been volatile. As they have no revenues because they are yet to start producing oil there have also been a number of placings to fund their programmes. Some would argue too many.

FOGL’s last fundraising was in January this year, when it raised almost £50m. The problem with placings from a private investors’ point of view is that they do not get to participate. This means their holdings are diluted – and there’s nothing that can be done to maintain their equity investment at the same level.

The other problem with pure explorers is that there is no guarantee that the company will strike oil.

Hydrocarbons are found in about one in seven wells drilled, so the odds are pretty equal to a flutter on the greyhounds. In this respect it is more akin to gambling than investing, that’s why Questor is cautious on companies with no cash coming through the door.

Oil explorers can sort out this cash problem through farm-ins, where other groups stump up the cash for a stake in the discovery. Indeed, last month Noble Energy said it would farm-in for 35pc of all FOGL’s licences (not including the well that found gas this week and another called Nimrod) for $25m (£15.4m).

There may or may not be substantial amounts of commercial oil sitting in basins near the Falkland Islands. However, from an investment point of view, Questor thinks this does not really matter. FOGL has no production, no cash flow and no significant resources. The entire valuation of the business – which stands at £225m – is based on its exploration potential in the Southern Falkland Basin. This is too much of a gamble in a race where there are a number of horses and lots of pitfalls.

This is not even considering the political risk from Argentina, which is likely to step up its rhetoric should commercial discoveries be made.

The rating is therefore avoid.

an interesting read hyleo, and certainly i agree that buying into E&P companies that have no proven assets is a gamble .... that is why only a very small small amount of one's portfolio so should be so based ..... however, certain people on this board clearly think that betting one's shirt is a great macho posture that is worth the strong risk of losing great slabs of money

Depends if you are making great slabs of money to be able to put down large wonga on a huge pay out if all goes well. :-))

now try that in english ...... i suspect that it in no ways detracts from my comment basis about % of portfolio

''Money''. Agree with what you say cynic.

The Questor article is riddled with inaccuracies - totally riddled with them - the writer should hang their head in shame.

For example : ................ Indeed, last month Noble Energy said it would farm-in for 35pc of all FOGL’s licences (not including the well that found gas this week and another called Nimrod) for $25m (£15.4m)................


That is total codswallap - Noble are paying back costs and cash and paying 25% of the well costs at Scotia. Far in excess of $25m that the Questor article says - they must be short to post such an article with so many mistakes in it. Extremely poor research - tut tut Questor - are you boys short ?

the tenet of the argument remains sound .... FOGL have found nothing of value to date

Frankly...don't go my newspaper tips...they are nearly always crap....the only time you went with them was in the boom years (if there were any)...then the share that was tipped would take off......otherwise they are nearly always late as we already know if the share is good or not......FOGL has potential and in my view have a very large gas discovery under their belt.....BOR have one as well....and RKH have oil.....lot more to be discovered.....might be with Scotia......or it might be more gas, which means it would be worth their while for sure to appraise later....

But it dos'nt stop you from jumping on the "momentum" band wagon does it cynic..
Or am i been a cynic..

Doesn't make sense... why not analyse it quick or it is trying to deviate our attention to Scotia as it has bad news from its analysis...


FOGL said it had not been possible to determine if the gas had any liquid content and it has decided not to drill another well at Loligo until the current results have been analysed. Instead the well will be plugged and abandoned and the next drilling will take place on the Scotia prospect.

You've turned into a right Diva this morning Hlyeo98...look they did not have the right equipment to run the tests....this was an exploration well.....through 5 targets...it turns out all were gas bearing, with very strong shows...it is almost impossible to have all the testing equipment for oil and gas ready for an exploration well...that is why appraisal wells come later....

hyleo, again, after the Noble farm out it was agreed that Scotia would be the next well - so Scotia is the next well.

Loligo they will want 3D over it, thats going to take 6 months to 9 months to get and process, so Loligo full update will be 9 months away imo.

There she is in all her beauty - Scotia.

Class 2 AVO.



Class 2 AVO indicates moderately consolidated sands, porosity should be in the 15% to 25% range.

The Toroa well went through the mid-cretaceous sands and found very good sands, which greatly derisked the porosity and permeability aspects of the reservoir potential at Scotia.

Based on good quality proven mid-cretaceous sands, class 2 avo I would suggest the chance of striking reservoired hydrocarbons at Scotia is high, the reservoir sands risk is much lower than Loligo (owing to Toroa results) - it really, IMO only, boils down to what phase the hydrocarbons are - gas or gas/condensate or oil.

Fingers crossed its oil.

I thought the chance of sucess at Scotia was 16.6%....