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/

When it comes to the collection of taxes or payment of licence fees I dont think the government would have a preference.

Falklands Says Exploration `Inevitable' Given Record Prices
By Tom Cahill
Oct. 4 (Bloomberg) -- BHP Billiton Ltd.'s decision to drill
at least two exploration wells in the Falkland Islands was
``inevitable'' as record oil prices reinvigorate interest in one
of the world's least explored oil provinces.
``With the price of oil where it is, it's inevitable that
the oil majors will look at the Falklands,'' Phyl Rendell, the
Falkland government's director of mineral resources, said in a
telephone interview today from Stanley, the islands' capital.
``We need some large companies to make it happen. It's just a
matter of time.''
Only six wells have been drilled in the remote South
Atlantic island, the subject of a 1982 war between the U.K. and
Argentina. Those wells, the only exploration in a region half
the size of Texas, were drilled in 1998, when oil prices on the
New York Mercantile Exchange sank as low as $10.35 a barrel,
compared with $79.66 today.
Rendell dismissed a report yesterday that Argentina will
``formally'' protest BHP's oil exploration permits, as reported
by the state information agency Telam. Argentina earlier this
year forbade companies that explore in the Falklands, which it
calls Islas Malvinas, from investing in Argentina.
``We're fairly used to it,'' said Rendell. ``Nothing has
changed as far as we're concerned. We're a British overseas
territory and nothing has changed overnight.''
BHP, the world's largest mining company, on Oct. 2 said it
agreed to acquire at least 40 percent of two Falkland licenses
with an option to increase to 65 percent. In return, it will
help finance a drilling program for Falkland Oil and Gas Ltd.
BHP said Argentina's concerns wouldn't affect its plans.

High Rates

``We will proceed as per our agreement with Falkland Oil &
Gas,'' Mark Lidiard, a London-based BHP spokesman, said today in
a telephone interview. ``We don't comment on issues of
sovereignty.''
The BHP licenses cover areas south of the islands, an area
that has yet to be drilled.
Exploration by Falkland Oil and Gas and other companies had
been stymied by high drill rig rates compounded by as much as
$30 million to transport a drill rig to the islands, a distance
of more than 8,000 miles (13,100 kilometers) from Aberdeen, the
U.K. center for oil exploration in the North Sea.
Royal Dutch Shell Plc, which led the 1998 drilling and has
since abandoned the region, defrayed costs by forming a sharing
agreement with other oil companies. That strategy may work
again.
``The previous model of sharing a rig worked for
everybody,'' said Rendell. ``Not everyone is ready to drill.
Those that are ready would take advantage.''
By coincidence, the Falkland Islands this week hosted its
first group meeting since 1998 between government and company
officials with prospects in the area, including Desire Petroleum
Plc , Borders & Southern Petroleum Plc and Rockhopper
Exploration Plc.
``We arranged this back in January but the meetings have
been influenced by the announcement,'' said Rendell. ``It's
still pretty early days, but it's much more focused.''

A positive future outlook. Although obviously nothing is guaranteed, especially in the oil industry, the prospects re oil and the Falklands looks better than ever.

http://www.falklandnews.com/public/story.cfm?get=4694&source=3

http://www.falklandnews.com/public/story.cfm?get=4698&source=3

Smiler o,

Morning, I have followed news on this web site for a while now. It probably gives the best updates in the area re Hydrocarbons there is.

hmm! ..... straight through 50 dma without even pausing for breath ...... 120 was a previous resistance, so guess sp could easily slip to there

Yes greekman its not bad !

cynic - not necessarily - an overreaction to a bout of profit taking and it dips below the solid resistance turned support of 130p from where it is now on the way back up. What does it matter where it goes this side of 2009?

depends on whether you want to trade or even buy

FOGL is holding up well after all the profit taking , there are over 100 prospects/leads in the Fogl/BHP Billiton jv licences. The upside potential is very good, if it does ever drop back to 120 I for one will be topping up !!

sp has broken down through 25 dma and is currently bouncing along (important) 50 dma ..... if it breaks down through this and stays there for more than a day or two, then 100 or thereabouts is far from impossible

Fact....The oil operators are back in London, sorting out logistic, drilling and legal information.
All these items were discussed within the Falklands meetings and are to be carried on within a regular basis.
According to the Hydrocarbons daily record of yesterday, the tight rig market means that at $85.00 per barrel the exploration rigs are being used for exploitation and not exploration.

Opinion.....Because of this until a rig/rigs are on scene I can't see this share moving upwards to any extent. Whether it moves downward will obviously depend on many external/world moving factors.
Just hoping BHP don't hang about.

No board for Ptr, So this company will experiance delays also the russian goverment to intervene with the ongoing situation. may revoke their licence. With this possability PTr share price as dropped to 30p and may be a sell of to 21.75p.

Do you know, whn you look at the Falkland Islands, you can see where the giant tore it in half and threw it into the water.

Nah - used to be part of Gondwanaland attacked to S. Africa. As it migrated it turned through 180% so the geology is similar but upside down to S. Africa. I expect the strait between them ised to be a continuation of the Rift Valley. WDIK.

Excerpt from Hydrocarbons Daily. 17/10/07

OIL MAJORS PULLING OUT OF NORTH SEA AS WELL AS LATIN AMERICA
By J. Brock (FINN)

South America has now become a very difficult place for oil majors to work. ESSO and Royal Dutch Shell plc want to get out of Argentina and have put assets in Argentina up for sale. Both Shell, Exxon/Mobil and Esso consider Latin America among their smaller business areas and with additional political and economic pressure have decided to cut their losses and pull out.
It is hoped that more oil majors like BHP Billiton will focus on the North, East and South Falklands Basins as the Falklands offer a stable government and economic growth. End of Excerpt.

So it looks as if the majors will soon start pushing into newer fields, such as the Falklands.

Many thanks for that info Greekman.

No prob. Also with Turkey on the march so to speak, the next few weeks in the oil markets, could get realy interesting.

http://news.bbc.co.uk/1/hi/uk/7048237.stm