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/

Sooner than was previously thought competition to grab some of the action around the Falkland Islands is going to intensify. The oil majors are generally having a hard time making new finds and political ill will is spoiling their expansion plans elsewhere in the world . So why not spend some petty cash exploring the South Atlantic after all it is still a British colony and all they have to fear is British taxes.

So what happened today to cause the 6.8% rise bucking the general trend?

I think it may have something to do with the continuing effect of the increased interest in the area, and yet again another spike in the cost of crude.
Also, a tip sheet (I think it was ARMSHARE) was tipping 5 small cap oil companies (subscribe and pay so only guessing) that one of them may have been linked to FKL.
As said only a guess, so someone may clarify.

Certainly there is the interest. My well-placed contacts in Stanley have said that the rumours are abounding about the near future with talk of drilling rigs!

Rockhopper also seem active.

FOGL will prob jump today on the back of the rumoured t/o interest of Dana for Faroe

Zak Mir is looking at Rockhopper to reach 125p if a resistance level is reached.

All these positives help Fogl and other companies with connections in the Falklands basin.

The Falklands area hopefully will be the equivalent of the 1898 Klondyke Gold Rush, which made a lot of people mega bucks. Well we can only hope. After all it is often said that Oil is the new Gold. Time to get me mule loaded up, now where's me shovel.

Note to self...Lay off those funny tablets the doc said would stop me hallucinating.

From today's FT:

Falkland hopes boost Desire
By Robert Orr and Neil Hume

Published: March 5 2008 02:00 | Last updated: March 5 2008 02:00

Two of the quartet of UK-listed stocks searching for oil around the Falklands closed at all-time highs yesterday.

Interest in the islands was reignited last month when Desire Petroleum signed a deal that should allow drilling to commence at some of its prospects in the region, five months after Falkland Oil & Gas struck an agreement with BHP Billiton.

Analysts pointed out that while there was evidence of oil, nobody had ever harvested commercial quantities.

Borders & Southern Petroleum and Rockhopper Exploration rose 12.6 per to 73p and 9.7 per cent to 79p respectively, both record highs. Desire rose 19.2 per cent to a 10-year peak of 79p.

Falkland Oil & Gas eased 1.9 per cent to 127p.

Analysts pointed out that while there was evidence of oil, nobody had ever harvested commercial quantities. ... and that is the bit to bear in mind

Here's what KBC Peel Hunt say:
Falkland Oil & Gas (FOGL) 2007 results & update EST: No Change, REC: CORPORATE#
There has recently been considerable market interest across the board in the small Falkland oil explorers and some strong share price rises, yet it remains a fact that so far the only company of the current generation to attract a credible leading industry partner and the only company with a defined path towards exploration drilling is FOGL. The farm out deal with BHP Billiton was a landmark transaction for oil exploration in the Falklands and leads to a realistic prospect of drilling within the next 12-18 months. While it retains a high risk profile as an undrilled province, FOGLs acreage has the benefit of extensive geoscience to define the prospects and moderate the geological risks. Most importantly, the size of the prize is significant: at least 10 billion barrels on the high-graded prospect inventory alone, making success in this project potentially transforming for BHP Billiton, let alone FOGL.



The financial results make relatively light reading, being a record of overheads and exploration expense. This year, the final cash balance of 12.5m, reflects the reimbursement of past costs made by BHP Billiton on completing the farm-in agreement. With BHP paying 68% of forward exploration costs (up to the first two wells) to earn its 51% interest in the licences, FOGLs cash will stretch considerably further than it did in the past. With a retained 49% equity in the licences and given the materiality of the prize, further farm-out deals may be contemplated as an alternative or a complement to raising further funds. Unsurprisingly, FOGL reports significant unsolicited interest from other potential farm-in partners.



While the farm-out deal deservedly attract most attention, the past year saw a continuation of an active exploration programme, including the acquisition of a further 9,950 km of 2-D seismic and over 750 km of Controlled Source Electromagnetic (CSEM) data. These add to the 22,450 km of seismic acquired over the previous three years. Screening and interpretation of this data enabled FOGL to compile a preliminary inventory of prospects with total unrisked reserve potential in excess of 10 billion barrels. Clearly, should early exploration drilling prove a commercial hydrocarbon resource, the ultimate potential could be materially higher than that figure. The point of this exercise was to establish the viability of the play types rather than to give a quantitative assessment.



At this stage of a major exploration project, an exploration valuation is arguably of limited relevance. It suffices to say that we estimate that even the most modest level of success on the basis of the limited prospect inventory could give FOGL an asset value of over 500p/share, while a West African style hit rate of 33% could see the value over 20 per share. (For details please refer to our research note dated 10 October 2007).

Global Petroleum H1 loss 6.57 mln aud vs loss 9.36 mln, hit by Kenya writedown
AFX


LONDON (Thomson Financial) - Global Petroleum Ltd said first half pretax loss narrowed to 6.57 mln aud, against 9.36 mln aud last year, with the company incurring a write-down in relation to the Kenya project of 7.91 mln aud a gain of 2.2 mln aud from the sale of some Falkland Oil and Gas shares.

The company said it is unlikely that Woodside Energy (Kenya) Pty Ltd will drill the second well on the Kenyan blocks by the due date.

Under the farm-in agreement dated June 28, 2006, Woodside agreed to drill one well in each of the Kenyan blocks L-5 and L-7, and to fully carry Global's 20 pct interest in those wells.

Global said if the well is not drilled, Woodside will be in breach of its obligations under the Farm-in Agreement, adding it is taking further legal advice on the issue.

Interesting article in Investors Chronicle:

Rigging the Falklands oil race
Created: 18 March 2008 Written by: Daniel O'Sullivan
Shares in Aim-quoted Desire Petroleum took off recently on news that it has recruited a farm-in partner to help fund the considerable cost of mobilising a drilling rig to explore three oil prospects offshore of the Falkland Islands. Shares in fellow Falklands explorers Rockhopper Exploration and Borders & Southern Petroleum also rose strongly, on hopes that all will benefit from having a rig in the remote South Atlantic region. But the reality is not that simple.

Desire has not yet named its partner. Non-executive director Stephen Phipps says this will follow Falkland Islands government approval of the deal, and he will not confirm market gossip that the incomer is privately-held London-based oil trading company Arcadia Petroleum. If Arcadia is the partner, its shared ownership with offshore drilling specialist Seadrill may have sealed the deal. Rig rig mobilisation is the major hurdle facing any company exploring offshore of the Falklands.

That's because any drilling operator diverting a rig to the islands would require considerable recompense due to time lost on the long voyage south when the rig could otherwise be earning money for its owner drilling prospects closer to home. And current sky-high rig rates due to a shortage of kit and frenetic drilling activity make the costs even greater. So pooling drilling requirements to create an economically-viable drilling campaign is seen as the solution. Desire did nothing to dispel this impression with a press release noting that "there is now the potential to hire a rig for a minimum six-well drilling programme, thus defraying mobilisation costs for all parties". Desire's 20m cash gives it sufficient funding for for two wells, its new partner is prepared to fund two wells, and in addition there are the two wells that Australian natural resources behemoth BHP Billiton contracted to fund when it agreed to partner Aim-quoted Falklands Oil & Gas (FOGL) last year.

It all sounds good on paper, and indeed all the Falklands explorers named above say they are prepared to work together on rig-sharing if the eventuality arises. That is a big if, however, with FOGL looking the likeliest party pooper. While rig-sharing with Falklands peers is likely, should BHP secure a unit for any meaningful length of time, Tim Bushell, chief executive of FOGL, says such a contract is only one possibility.

Another possibility being considered in earnest by BHP is snagging a rig for just the briefest of stopovers en route from an already-scheduled location changeover between West Africa and Brazil, or vice versa. Such a deal would only be possible due to BHP's heavyweight contacts, negotiating strength and cash-rich persuasiveness. The resultant window would allow no more than a couple of wells to be drilled just for BHP/FOGL, with other operators seeing no benefit.

Mr Phipps admits BHP/FOGL might well go it alone. "I don't think that they need us as much as we would rather need them!" he says. But both he and Rockhopper managing director Sam Moody point out that it might yet be BHP/FOGL left out in the cold rig-wise. Both Desire and Rockhopper are exploring in the basin to the north of the islands, which is shallower and calmer than the southern basin that BHP/FOGL and Borders & Southern are in. As such, the northern operators could get by with a lower-specification and cheaper rig - 'third generation' as opposed to 'fifth generation' semi-submersible. If they locate one of these on a viable contract, they will go ahead on their own.Whatever happens, all parties agree that offshore drilling should finally be underway by the beginning of 2009, if not earlier. This gives time for Borders & Southern to join the drilling party if a consortium solution emerges. Having just completed seismic surveys, chief executive Howard Obee says promising prospects should be identified by summer.

Should any of these companies actually strike oil, the share price uplift would be immense. Mr Bushell says if just one of his 10 worked-up prospects - selected from hundreds of promising leads - comes in as a 500m barrel discovery, then presuming a flat oil price of $50 per barrel, FOGL would be worth 10 per share. Using the same oil price, Mr Moody believes that the net present value of a 100m barrel discovery on his licences is around $1bn. Splitting that 500m-equivalent among Rockhopper shareholders equals some 6.60 per share, although, by the time of drilling its share may have been diluted through a farm-in. It looks like there are some very exciting times ahead for this band of oil-exploration companies.

http://www.fogl.com/documents/FalklandOilandGasLimited-CorporatePresentation-2008-03-18.pdf

!

All this is a regurgitation of earlier speculation.FOGL has a deal with BLT a well resourced company able to deliver its contractual obligations.

http://www.falklandnews.com/public/story.cfm?get=4890&source=3

New article on FOGL, click HERE

Falkland Oil and Gas Limited
15 April 2008

15 April 2008


Falkland Oil and Gas Limited

Grant of Options

Unapproved Option Scheme

Falkland Oil and Gas Limited ('the Company') announces that on 14 April 2008 Tim
Bushell, Chief Executive, was granted an option over 43,028 Ordinary Shares of
0.002p each in the Company ('Ordinary Shares') at an exercise price of 125.5p
per Ordinary Share.

The option may be exercised between 14 April 2011 and 14 April 2015 subject to
the satisfaction of performance criteria relating to the compound annual
increase in the Company's share price over the period 14 April 2008 to 14 April
2011 ('the Performance Period').

The option shall not be deemed to be exercised at all unless the price of an
Ordinary Share increases by more than 10 per cent compound during the
Performance Period. If the price of an Ordinary Share increases by 10 per cent
compound per annum during the Performance Period the option maybe exercised as
to 25 per cent of the shares under option and if the price increases by 50 per
cent compound per annum during the Performance Period the option may be
exercised in full. The option shall be deemed to be exercisable over a reduced
number of Ordinary Shares for increases between 10 per cent and 50 per cent
calculated on a straight line basis.

Interest in Shares

Prior to the above grant Mr Bushell owned 60,000 Ordinary Shares in the Company
and had options under the Company's Unapproved Option Scheme over 652,222
Ordinary Shares of which 457,627 are exercisable at 118p and 194,595 of which
are exercisable at 92.5p subject to the satisfaction of performance criteria. He
also has options under the Company's Long Term Incentive Plan over a total of
321,789 shares which are exercisable at par subject to the satisfaction of
performance criteria.



- ends -



Enquiries:

Never mind granting options to directors isn't it time for a progess report?

There must be some reasonable expectation that the SP could increase by 50% pa compound over next 3 years. Let's say he hits half way between 10% and 50%. That makes an SP of 125.50 (as it was yesterday) X 1.30 ^3 = 275p. Having started at 40 p at IPO in October '04, that gives me a compound return of 34.5% over the 6.5 years to April 2011. That'll help buy me pension for sure.

Personally I would not be surprised to see the SP somewhere between 10 and 15 within my lifetime, if they find half what they hope for.

;) Looking Good

Going on steadily!

Through 151.5 and northbound.