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/

Penguin News today

DUE to arrive in Falklands waters in mid-January is the brand new Fugro
Saltire a survey, construction support and intervention vessel, built earlier
this year, which is to carry out seabed surveys for BHP Billiton.
Moored in Falmouth in the UK at present, visitors to the docks have
said they are impressed with the vessel. Andrew Bell, formerly of Curnow
Shipping Ltd and a friend of Rob Pitaluga, said the ship is the largest off
shore supply vessel he has ever seen.
It is thought that the Fugro Saltire is being fitted with a drilling rig
before heading South.

http://www.falmouthpacket.co.uk/news/fpboating/3966445.Fugro_Seacore_drilling_contract/

Fugro Seacore drilling contract

This must be considered good news and confirms BHP/BLT are serious about starting a drilling programme in the near future.

RNS 16.12.08
"Site Survey Commences
The MV Fugro Meridian survey vessel has now commenced work on the programme. The MV Fugro Meridian, which is operated by Fugro Surveys Limited, will acquire digital site surveys in order to assess drilling hazards in the top few hundred meters of sediment below the sea bed. Detailed sea bed bathymetry and imaging surveys will also be obtained to assist in ensuring the stability and suitability of the selected drill sites.

The British Antarctic Survey vessel the James Clark Ross has been contracted to deploy wave and current meters. These instruments will be used in the environmental assessment and the preparation of rig mooring and riser design.

The final part of the site survey is a coring programme that will establish the make-up of the top 150 metres of seabed. Information derived from this survey will be used to assist in the detailed casing design of the wells. This survey will be carried out by the MV Fugro Saltire and is planned to commence in January 2009.

The site survey programme will be undertaken on 5 different prospects, which represent a range of geological play types across the licences.

Outlook

The site survey program is expected to be completed in early 2009. Further updates on the progress of the site programme will be provided on FOGL's corporate website."

http://www.mercopress.com/vernoticia.do?id=15522&formato=HTML

BHP Billiton oil survey vessel on its way to Falklands
The Falkland Islands are expecting the arrival in mid-January of the brand new Fugro Saltire a survey, construction support and intervention vessel, built earlier this year, which is to carry out seabed surveys for BHP Billiton.




Moored in Falmouth in the UK at present, visitors to the docks have said they are impressed with the vessel. Andrew Bell, formerly of Curnow Shipping Ltd and a friend of Rob Pitaluga, said the ship is the largest off shore supply vessel he has ever seen.

It is thought that the Fugro Saltire is being fitted with a drilling rig before heading south.

Representatives from BHP Billton visited Stanley last November to lay the groundwork for the Southern Ocean drilling program which they hope will begin in some 12 to 18 months time.

At the time the head of the Falklands exploration project, Deb Pfeiffer, and External Affairs manager for BHP, Julie Tushingham were confident that the melt-down of worldwide financial institutions will not impede the program.

Since BHP Billiton entered into a licence farm-in agreement with Falkland Oil and Gas Ltd in October 2007 and acquired a 51% holding in the company, the presence of BHP Billiton has considerably increased interest in oil exploration in Falklands waters.

BHP Billiton interests refer to the East Falkland Basin located off the southern and eastern coast of the Falkland Islands.

The production licenses cover approximately 18 million acres and are located in water depths ranging from approximately 200 to 2,000 meters. At the time Steve ORourke President Exploration of BHP Billiton Petroleum said

"We believe this substantial Falklands acreage will be a good addition to BHP Billiton Petroleums global portfolio and we look forward to working with our partner to pursue this under explored area"

He added that "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.(PN, MP).-

In the present climate of appearing to get only bad news, a picture to gladden the heart.
Not very good at geography, anyone know if there are any icebergs between Falmouth and the Falklands.
The way my lucks going at the moment, if there is this is the one ship that will hit it.

icebergs to be found further south.... - thankfully

Cheers Ajcc,

I was being facetious. But with my luck and global warming, one might just be drifting as much as the SP, although in a different direction.

true greekman - nothing would surprise me anymore.... remember those oil "experts" predicting that oil would never go below $100/barrel and would likely top $200???!! Also dear Prudence stating "no more boom and bust".... ho hum, got to have a sense of humour...

Look at slide 10
company share valuation Assumes flat oil price of $50/bbl
if Loligo success case.
www.fogl.com/documents/FalklandOilandGasLimited-CorporatePresentation-2008-03-18.pdf

http://www.independent.co.uk/news/business/sharewatch/share-tips-lets-be-daring-this-year-after-all-how-much-worse-can-it-get-1221120.html

Share tips: Let's be daring this year: after all, how much worse can it get?


We pick potential winners for this year

"What of black gold? Falkland Oil & Gas looks a fairly decent bet. Smaller companies in the sector have taken a beating over the last six months, and there is little reason for short-term optimism as the oil price remains so low. But Falkland is in a better position than most. The company is still on track to start drilling at the end of 2009, with plenty of activity like sea bed imaging surveys and hazard assessments to push up the underweighted stock in the meantime. There is also the expectation of an announcement that BHP has secured a rig, which will be a further catalyst for the share price."

start drilling at the end of 2009 .... so why buy now, if at all?

why should there be a shortage of rigs in 2009 with oil under $50?

Cynic,

Timing, timing and timing. Not saying I know when it would be the best time to buy (if only) but as the drilling timetable gathers pace the sp will rise on that alone.

Halifax,

Because no one knows when the price of oil will reach $100 plus again, but IT WILL. The big problem oil companies have is knowing when the oil price/demand will spike. Oil companies have to try to read the future of the next 2 to 3 years minimum.
What price of oil if the Middle East really does boil over.
Even if demand continued at its present level, supply will not, therefore although demand will always lead supply/price, we are always nearing that day when supply can not keep pace.
I can not remember when there was not a shortage of rigs.

Greek.

i agree with your first statement.
however, do not lose sight of the fact that FOGL and a myriad of others E&Ps have not actually found any oil, let alone started to extract it, so the price of crude has only limited value to them.
also, FOGL is not scheduled to even start drilling for another 9/12 months

Morning Cynic,

As you say no oil found yet. I am not one to think there is definitely gold in them there hills (or oil under them there seas) but I feel the price/risk is a very good bet, and that is exactly how I look at it one big gamble for a very good prize. Of course there could be nothing at the end of the proverbial rainbow, that is why I only have a very small slice of my Portfolio invested.
Note... If I was not a holder in FKL/Fogl or any connected to the Falklands, I would not buy now, but would play a wait and see strategy, not leaving it past mid year though. Obviously a personal view.
Full of 'Metaphors' this morning.

Aye to do tend to agree greekman, but I still think from here you will see a slow tic up in hope of some action in 2009 ? we will see ; )

http://www.falklandnews.com/public/story.cfm?get=5287&source=3

Gerald Cheek mentioned that a drill ship was in Falklands waters. Cllr Hansen said it was doing a sight and seismic survey and Cllr Clausen mentioned they drilled 3 holes at 300 metres deep. Cllr Summers said that BHP Billiton were very low key about it. Two representatives from the industry would be in the Falklands in due course and more could be known then.

no one will be much interested in spending heavy exploration money in these waters until there is some significant sign of a sustained upturn in world economies and the oil price

However looking at the longer term rig availability should ease if the oil price remains around $50. BHP/BLT can certainly afford to drill and probably think the risk is worth taking, otherwise why buy into the FOGL story?