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/

BLT bought 40% of the licences, with an option to buy up to 65%. Although BLT & FOGL are separately quoted companies, there must surely come a time when movement in the BLT sp directly affects the FOGL sp? Also, should FOGL strike oil then there should be a proportionate increase for BLT? Or is that not how it works?

Of Interest :


BHP to keep oil, gas business despite Rio bid: analysts
Mon Nov 12, 2007 7:10 AM GMT
Email This Article | Print This Article | RSS [-] Text [+] By Fayen Wong

SYDNEY (Reuters) - BHP Billiton Ltd/Plc (BHP.AX: Quote, Profile , Research) (BLT.L: Quote, Profile , Research) was unlikely to offload its lucrative petroleum division to help fund a $140 billion takeover bid for rival Rio Tinto (RIO.AX: Quote, Profile , Research) (RIO.L: Quote, Profile , Research), analysts said.

BHP is poised to reap major returns from the business, with some of its biggest oil and gas projects due to come onstream in the next two years.

"Selling the assets right now, ahead of completing major developments, means they won't be able to realize the maximum value," said Warren Edney, a resource analyst at ABN AMRO.


Analysts said BHP's strong balance sheet meant it should easily be able to secure the financing needed for such a deal without having to sell the petroleum business to raise funds.

British newspapers reported over the weekend that BHP may look to sell its oil and gas arm for $40 billion to help fund a bid for Rio, which is not in the oil business.

A BHP spokeswoman declined to comment on the report.

BHP has so far proposed an all-scrip bid to Rio, which has rejected the offer, and fund managers have suggested it may need to sweeten the offer with a cash component. Continued...

© Reuters 2007. All Rights Reserved. | Learn more about Reuters

Oil Price Racket.

Just a couple of days ago all the news was....Oil flow not keeping up with demand. Inventories will start to run short. World shortage fear.

Now todays news is....Higher US inventories and an OPEC report that the forecast demand is lower than expected have helped to decrease the price of Crude today.
Crude prices remain artificially high with the cost being passed down to consumers from everything from vegetables to spare parts.

Funny how easy it is to state shortages, and push prices.
The world is a slave to oil and will continue to be so for many years yet.

As I have previously stated when governments scream shortages.
When did you last have difficulty buying as much fuel as you require.
If there were real shortages, there would be queues, rationing or both. That has always been the way of things.

Bl..dy politics.

Greekman (Mr Angry)

Lets hope this does not effect the take up option between Fogl and BHP, as even for a company the size of BHP this is a big knock.

Sources close to BHP have revealed that internal estimates for the development of Olympic Dam, a massive copper and uranium resource in South Australia, have increased to as much as $20bn. If these estimates prove accurate, it could delay the Olympic Dam expansion by years, creating a shortfall in BHPs future earnings, reports the Times.

Option take up not as much as it could be.

BHP Billiton has decided to exercise its option from 40% to 51%. As Billiton had an option of up to 65% I feel this will keep the sp stable.
Not disappointed though.

Full RNS :

Falkland Oil and Gas Limited
28 November 2007

Falkland Oil and Gas Limited



FOGL Partner increases interest in exploration agreement



Falkland Oil and Gas Limited ('FOGL') is pleased to announce that BHP Billiton
has decided to exercise its option to increase its interests in FOGL's 2002 and
2004 licences to the South and East of the Falkland Islands.



Highlights:



BHP Billiton will increase its interest to 51% from the 40% announced
on 2 October 2007

FOGL retains a very substantial stake in the licences

BHP Billiton will pay FOGL an additional US$2.75 million in
reimbursement of historical costs

The decision by BHP Billiton to increase its interests in our licences
further confirms our view of the significant petroleum potential of the
South and East Falkland Basins.



Details of the agreement

Under the terms of the farm-out agreement announced on 2 October 2007 BHP
Billiton had the option to further increase its interest in the licences. BHP
Billiton has decided to exercise this option by increasing its interest to 51%.
Consequently, BHP Billiton will pay four thirds of 51% (approximately 68%) of
the costs of the near term 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 a further US$2.75
million in relation to certain costs already incurred by the company. At end
2007 FOGL's forecast cash position is 12.2 million (US$25 million). As such,
FOGL is now funded through a significant proportion of the near term exploration
programme, which will include the drilling of the first two exploration wells.

Since announcing the agreement with BHP Billiton, FOGL has had discussions with
a number of other parties potentially interested in farming in to the area.
FOGL will now look to advance these discussions, but with the clear intent of
retaining a material interest in its licences.




Tim Bushell, Chief Executive of FOGL commented:

BHP Billiton's decision to increase its interests in our licences further
confirms our view that the South and East Falkland basins are highly prospective
and have the potential for the discovery of significant volumes of oil and gas.



28 November 2007



Note to investors:

FOGL is planning to make an announcement on its 2007 exploration results and
operational plans shortly.

Excellent news!

http://www.falklandnews.com/public/story.cfm?get=4775&source=3

really cannot get enthusiastic at current price ..... not only is sp quite well below both 25 and 50 dma, but those are also too close together to make one believe they will not form fairly stern resistance - perhaps "could not" would be a better phrase

Cynic, I will buy in again if i see a drop to 100/120 as the possible up side still looking good so still keeping an eye on proceedings !! will post any new news on rig /BHP Delvelopments when they come ! Also Cynic GPN looking cheap !

http://oilport.net/news/article.asp?Id=9300

06/12/2007

At the end of November Australias BHP Billiton agreed to increase its holding in South Atlantic acreage held by Falkland Islands Oil and Gas to 51%, and to fund the cost of two exploration wells.

Accordingly Desire says it may now be able to fund up to three other exploration wells in the South Atlantic out of its own resources, and expects a rig-share deal with other South Atlantic licence operators will be possible, including mobilisation and demobilisation costs for an extended exploration campaign.

Desire has already identified 10 prospects, Liz, Pam, Beth, Anna, Ann, Rachael, Ninky, Jan, Orca South and Kath in its operated trances C and D in the North Falklands Basin, with a total of most likely unrisked recoverable potential of 2.3 Bn bbl of oil.

Liz, the largest ranked prospect, is estimated to contain 660 m bbl of potentially recoverable oil.

i agree that 120 may be a support, and at 110 it looks a better bet still ..... undecided whether or not i shall be tempted

http://www.oilbarrel.com/home.html
07.12.2007
Falkland Oil & Gas Gets The Farm Out Increment It Wanted To Bring It Within Striking Distance Of Drilling
It seems to have taken an unconscionably long time but AIM listed junior Falkland Oil & Gas, together with its partners, looks as if they are now within striking distance of drilling some exploration wells around the Falkland Islands. These still British possessions have long been a dream area for some oilmen and investors. The thought is that there are signs this is a last great frontier and there could be huge amounts of hydrocarbons around the remote islands in the southern Atlantic.

There has been some drilling around the Falklands. In 1998 London junior Desire Petroleum participated in a six well drilling campaign alongside Amerada Hess and Shell. Desire had interests in two wells around North Falkland. Five of the six wells had hydrocarbon shows. Well 14.10-1, drilled by Shell, had live oil at surface of 27 degree API. Another well 14/5, also drilled by Shell, had 32 per cent gas at surface. The drilling was not a great success but it was not a complete failure either.

The wells were drilled back to back and there was no time to evaluate each well. For reasons, which, in retrospect, seem a little curious, the initial drilling was not followed up.

Ian Duncan, the Chief Executive Officer of Desire, later told oilbarrel.com that he was wary of criticising anyone but said: You have to remember this was a time when the oil price had fallen to US$10 a barrel. The majors had to compete internally within the company for scarce rigs. Someone in London or Houston only had to say why are we wasting our time in a marginal area in Falkland when we could be on to a surer bet in the Gulf of Mexico.

For whatever reasons the majors pulled out. But Desire, whose shares had enjoyed a roller coaster ride, rising steeply and then falling back sharply, has kept the faith and still believes in Falkland.

Meanwhile Falkland Oil & Gas floated on AIM and together with Aussie partners Hardman Resources and Global Petroleum assembled a huge portfolio, amounting to 83,700 sq km, more than the southern basin in the UK North Sea. It was partnered in 33,700 sq km of the acreage by Perth-based Hardman.

There was a 2D seismic shoot in 2004 over 9,450 sq km. There was great excitement over the findings. There was more seismic and more excitement. A large number of leads were established over various play types. There was talk of maybe 200 million barrels of oil even a possibility of 1 billion barrels of oil in these waters. But of course you have to drill wells before you know.

Could FOGL get a rig? Could it ever? 2006 came and went and there was no rig. The Falkland Islands are a long way from anywhere. Rig prices kept going up and getting more scarce. 2007 looked as if it would also come and go and there would still be no rig. There were endless rumours that a major resource company was about to step into the breach. Mobilising a rig to the Falkland Islands would be a big financial undertaking; numbers of US$40 million at least have been bandied about. There was little prospect of AIM-quoted FOGL, which was dumped by its partner Tullow Oil that inherited a share of the assets following the takeover of Hardman Resources, raising the money on its own. It was vital to find a farm-in partner with deep pockets if it was going to meet its drilling commitments.

Finally, in October, Australian mining, metals and petroleum company BHP Billiton was named as FOGLs new partner.

Under the farm-in agreement BHPB was to earn a 40 per cent interest and operatorship of the licences by drilling two wells over the next three years. It was to pay some of FOGLs drilling costs - BHPB was to pay 53.3 per cent of the well costs to earn its 40 per cent share - and pay FOGL US$10 million to cover some of its historical costs on the licences. These did not seem the most generous farm-in terms but they would have started to look sweeter should BHPB have exercised an option to increase its stake to 65 per cent, at which point it would have to pay another US$6.5 million in historical cost and cover 87 per cent of the drilling costs. This would have left FOGL with just 13 per cent of the drilling costs (although on a US$100 million drilling programme that is still a hefty bill), some of which would have been offset by the US$16.5 million cash payment.

BHPB had until November 27 to improve its offer. Well, it has not come up with the full whack but its new offer will almost certainly do. BHPB has elected to increase its interest in the South exploration licences operated by FOGL from 40 per cent to 51 per cent and to assume operatorship of the licences. Under this extended agreement, BHPB will pay FOGL an additional US$2.75 million in respect of past costs and will contribute 1.33 times its working interest share of the exploration costs up to and including two exploration wells. Consequently FOGL will have received cash of US$12.75 million and will pay approximately 32 per cent of forward costs while retaining a 49 per cent working interest in the licences.

The point is with the new cash and a proportion of its share of ongoing costs covered, FOGL will not need to enter into further farm-out deals to continue with the short-term work programme. On the other hand, it still has sufficient equity to secure further farm outs in due course should that be deemed necessary. FOGLs shares have risen sharply since BHPBs involvement became known.

Falkland Oil and Gas Limited
13 December 2007

Falkland Oil and Gas Limited

Exploration Activity Update



Falkland Oil and Gas Limited ('FOGL' or the 'Company') is pleased to provide the
following update on its Falkland Islands exploration programme and in particular
the results from the two surveys acquired during 2007:





Falkland Oil and Gas Limited (\'FOGL\' or the \'Company\') is pleased to provide the
following update on its Falkland Islands exploration programme and in particular
the results from the two surveys acquired during 2007:



Highlights



• Encouraging results from the Controlled Source Electromagnetic (\'CSEM
\') survey.



• Positive CSEM anomalies, indicating the possible presence of trapped
hydrocarbons.



• Improved definition of our top ranked prospects, as a result of the 2D
infill seismic survey.



• FOGL\'s top ranked prospects have the potential to contain hydrocarbon
resources in excess of 10 billion barrels oil equivalent (mean, un-risked)





CSEM Survey

The CSEM survey was carried out on behalf of FOGL by Offshore Hydrocarbon
Mapping plc and was completed in August 2007. Over 750 kms of CSEM data were
acquired along 7 lines, over a total of 12 prospects. This programme exceeded
the Company\'s Licence commitment to the Falkland Islands Government.



Basic processing is now complete on all lines, and enhanced processing and
interpretation, will continue over the next few months. The CSEM data has now
been combined with FOGL\'s seismic interpretation and images, in order to
highlight prospects of interest.



2D Infill seismic survey

The FOGL proprietary 2D seismic survey was acquired by Wavefield Inseis AS
between 19 November 2006 and 31 May 2007 and a total of 9,950km were acquired:
5215 km in the 2002 licences and 4735 km in the 2004 licences.



Survey Results

CSEM

Results from the CSEM survey are encouraging, with \'positive\' CSEM anomalies,
indicating the possible presence of trapped hydrocarbons, being recognised over
a number of our best prospects.



The most encouraging CSEM anomalies have been identified over the following 7
prospects: Loligo, Garrodia, Nimrod, Caird, Toroa, Lutra and Undine. These
prospects also benefit from seismically derived direct hydrocarbon indications.
All of these features could contain large amounts of oil and gas, with
individual prospects containing potential recoverable volumes (mean un-risked
resources) ranging up to 3,500 million barrels.



FOGL has focussed its work during the last year on a shortlist of ten prospects,
which promise to offer the lowest exploration risk and largest resource volumes.
This prospect inventory has the potential to hold, on a cumulative basis, in
excess of 10 billion barrels oil equivalent (mean, un-risked resources). In
addition, FOGL has identified over 90 other leads, which are not included in
this estimate.



2D seismic infill

The 2007 2D survey was designed to infill the existing seismic grid in order to
better define known leads and prospects. The new data has led to the
identification of a significant new lead, located in quadrant 61. Other leads
have been matured into substantial prospects. New seismic was also acquired over
the fold-belt play and a seismic amplitude response combined with an attractive
structural style, led to the decision to acquire additional CSEM data over
another new lead.



The new seismic data have been carefully processed to preserve \'true amplitude\'
and a suite of AVO products is currently being produced from this dataset.
These seismic products, which have the potential to be direct hydrocarbon
indicators, will be generated over each prospect and the results, combined with
the CSEM data, will determine a final prospect risk. This work will help
prioritise the best prospects for drilling.



In summary, many of our top ranked prospects have seismic amplitude support, AVO
responses and positive CSEM anomalies.



Licence Terms

The Falkland Islands Government (FIG) has consented to the assignment of a 51%
licence interest to BHP Billiton and the approval of BHP Billiton as licence
operator. All parties envisage the execution of formal documents to finalise
this will occur shortly.



Under the revised Licence terms agreed by FIG, Phase 1 of the licences will be
extended by 3 years until December 2010 and Phase 2 extended by 2 years, until
December 2015. In return FOGL and BHP Billiton have agreed to make a 50%
relinquishment of Area B (PPL30 and PPL31) of the 2004 licences and a 25%
relinquishment of Area A of the 2004 licences (PPL 25 - PPL 29 inclusive). All
significant leads and prospects have, in the opinion of the FOGL, been retained
within the 2004 licence area. The retained area of the 2004 licences will be
combined into a single administrative unit, with a total area of 34,336 square
kilometres. No further relinquishment of the 2002 licences will be required as
part of these changes. The total retained area of the 2002 and 2004 licences
comprises 48,853 square kilometres, equivalent to over 220 UK North Sea blocks.



Forward plan

The results of the CSEM survey will be fully integrated with our existing work
and with the recent 2D infill seismic in order to produce, a short list of the
best prospects for drilling. This work will now be carried out in conjunction
with our farm-in partner, BHP Billiton, who will take over operatorship of the
licences from 1 January 2008. Seabed coring and site surveys are expected to be
carried out in 2008. BHP Billiton is currently reviewing a number of potential
rig options and an update on this will be provided at a future point.



Tim Bushell, Chief Executive of FOGL commented:



\'We are delighted with the results of our 2007 exploration programme. We have
now identified a number of prospects that are seismically well defined and also
have positive CSEM evidence for the presence of trapped hydrocarbons.
Furthermore, all of these prospects have substantial reserve potential. The
results of the CSEM and 2D seismic infill surveys have reduced exploration risk
and have considerably improved the chances of finding commercial quantities of
oil and gas within our licences.\'



13 December 2007

A lot of very good stuff in there, especially \'This programme exceeded
the Company\'s License commitment to the Falkland Islands Government\'.

Still a risky share to be in but that risk is looking less after this report.

Of Interest:

http://www.sartma.com/artc_4877_FI_0.html

Of Interest:

http://www.mg.co.za/articlePage.aspx?articleid=329121&area=/insight/insight__international/

World battle for seabed

The United Kingdom (UK) has signalled, for example, that it intends to register claims on the Atlantic Ocean bed around Ascension Island, in the Hatton/Rockall basin, below waters surrounding the Falklands and South Georgia, and on the continental shelf sloping away from the British Antarctic Territory.

perhaps they'll find the remains of SUB down there!

Or even Atlantis!

FOR IMMEDIATE RELEASE
15th JANUARY 2008

PORT LOCATION - ISSUES

Balancing the cost of a purchase against its value is a difficult decision for all of us - somehow, we always seem to want something just that bit more expensive than we can afford. That long wheelbase 5-door is so clearly the right car - but the money will only buy a short wheelbase 3-door.

Of course, sometimes we can borrow extra money to make the move to the next model up - and some young people seem to think that parents will provide, that money is something which you just ask for.

For most of us, however, major purchases (house, car) are carefully considered, and what we buy isn't usually what we would really like, but a compromise driven by what we can afford.

Being really honest about the real benefits of a bigger car is one essential element in making sure that the right car is bought.

Deciding on an appropriate deep-water port for the Falkland Islands for the future is one of the major purchasing decisions the Islands must face. To make the right choice of which port is appropriate means balancing what is affordable with the benefits of different options. No-one is going to lend money unless it is clear that it is going to be repaid - and there is no-one clamouring to donate the millions needed.

The Royal Haskonning report has laid out with some clarity the port requirements of the different sectors for the foreseeable future. It makes sense to plan on the basis that the oil industry needs only facilities to support exploration at present - if development occurs, then the availability of finance becomes much less of an issue.

So the challenge is to plan for affordable, sensible facilities and make it possible for the government and private sector to invest wisely, in a way which gives the best possible return on the investment. The small size of the Islands' economy, and the high cost of major construction projects like a port, makes that complex. Many of the issues have been discussed before, but the seminar at 09:00 on January 28th in the Chamber of Commerce is aimed at bringing all the different advantages and shortcomings of the various options to one place, to compare them and to give Councillors a jumping-off point to move forward to some detailed planning.

This is a decision which is only going to be made once - FIDC hope that everyone with an interest in the subject will contribute to what promises to be an exciting discussion, we hope for the final time.