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/

start drilling late 2009/2010 ..... as i said, a long way off, and that is just the preliminaries .... which bit don't you understand?

Hi Cynic,

Whilst I appreciate all views, positive as well as negative, I am sure myself and others would give more credence to your opinions if just now and again they saw a positive side.
Whilst I always try not to see things through either dark or rose tinted glasses, I hopefully try to see realism.
How a time line of late 2009, early 2010 can be seen as a "long way off" in the oil industry is beyond me.
In the oil industry a period of 12 months is just round the corner.

i don't see much to be positive about in the falklands ..... no one has ever extracted commercial quantities of oil from the region and the waters are hostile in the extreme ..... FOGL and the ilk are amoebic - i.e. not even minnow-sized! - and, to make another bad pun are out of their depth on their own.

if you read the report from TLW, as i have posted before, you will see that even in an "easy" area, from finding to flowing TLW commented that 3 years was an amazingly short time.

so, from first spudded well, even if they hit the jackpot first time - chance is 20% at best - you will be looking at at least 6/7 years and probably a lot longer bfore the stuff is actually flowing.

i think that's a long time, don't you?

g
you are so right, but if we are all fully invested here there and everywhere, we surely have to be aware of where? in order to use our capital to maximum. how many of us have wanted to invest in a good shorter term opportunity only to find our money is "tied up" in a "waiting" stock? resulting in being patient and sometimes wrong and missing opportunities elsewhere? might be something we all might like to take a look at.
personally i give a lot of credence to cynics opinions and i often see a positive side and post from cynic.
good luck
regards
jkd

on that angle, if you like minnow/spivvy E&P stocks, PCI may yet make a decent and arguiably better bet, and will assuredly be on a shorter timescale that FOGL and similar falkland stocks .... plenty of background reasoning on that site

OK you say, "you will be looking at at least 6/7 years and probably a lot longer before the stuff is actually flowing. i think that's a long time, don't you?".
I do agree re that comment and take your point. But although agreeing that actual full flow production is years away, it will be the actual flow from the first full drilling test that will affect the sp big time. And I appreciate that if that test drilling is not as we hope the sp could bucket, big time.
Although still a win all/loose all bet, I don't think we should write Fogl off as a no hoper yet.
As for not even being minnow sized, an ex college of mine invested in Tullow Oil more than 20 years ago. Look at where they are now.
Most companies such as Fogl won't make it but, some undoubtedly will.

i did not say FOGL was a no-hoper - the likes of GOO and AMER come far closer to that ..... i just see no hurry at all to jump in here ..... even if FOGL are to drill at end 2009, there is no need to even contemplate for several months, and even then, only if crude has recovered to say $60/70

I did not mean to infer that you did (i did not say FOGL was a no-hoper).
I also agree that there is no hurry to jump in.
As a holder of FKL I have an interest in Fogl (no direct stake) but if I was considering a stake in Fogl I would be waiting a bit longer for a clearer picture. Timing as I am sure you agree is everything. The timing itself must be the most difficult calculation in any share.
But I feel that if you wait till the results are in re a full test drilling, and/or the price per barrel to recover back to $60/70, the best chance will be missed.
It all obviously depends on the risk you are willing to take.
At present I feel both Fkl and Fogl are a hold.
Time as they say will tell.

Cynic,

The Falklands You have a number of companies hoping to drill in the near future but when you are putting all the Falkland plays in to one basket you are sadly getting mixed up as Desire Petroleum and Rockhopper are in shallow water and dont need a high spec rig and have better economics and the NFB is the only one with proven oil and gas shows on there acreage.

FOGL and BOR are in deep water and need a high spec rig and need to pass the hat round at sum point and with it been so deep the economics suck.

Drilling in the Falklands weather wise is no different to drilling in the North Sea

marky why did BHP/BLT choose to j/v with FOGL rather than DES or RKH if what you say is correct?

Halifax what do you think is cheaper to drill Desire Acerage or FOGL?

Which acerage has been drilled before and has proven oil and gas shows?

Maybe Desire did not want to give away more than half the company the deal they got with Acadia is world class and you wont find a better deal around.

BHP got 51% of all acerage to get in to bed with FOGL they had to give away that much to get a major behind them.

What has Desire Petroleum given away to get there major Acadia who are owned by seadrill?

When you compare the deals thery are miles apart.

and why do you think there will be commercial oil found and flowing within say 5 years? ..... no need to answer that one

Cynic i did not say 5 years!

Cynic tell me if any company from the Falklands sends an RNS out saying they have secured a rig where will the share price go?

Desire Petroleum are talking to 7 companies at present insecuring a rig,news could be any time.

a bit of fun for you all ..... a little share comparative performance chart over the last year ..... in bottom place FOGL, and then in ascending order PMO, HOIL and TLW

Cynic that is like comparing a Ferrari to a larda there is no contest as FOGL are a junior in the Exploration front but there is no saying that FOGL over the years may not turn it to a Ferrari, more fool you to even putting a graph up to compare them.

I see my last question to you did not reply to

The lights on but dim!!!!springs to mind

did not see your Q ... obviously crossed .... getting a rig at the moment is child's play.

the only point of my comparative chart was to highlight the underperformance of FOGL realtive to some "proper" oil companies .... the same could be said even more meaningfully with the likes of GOO and AMER.

what it means of course, is that it is self-apparent where your money would have been better invested in the same sector AND it highlights why putting money into FOGL (and similar) at this juncture is more than a little premature

From FOGL PDF

IF oil found I don't think it take 5 years to produce.

Surmountable Technical & Commercial Hurdles

Weather conditions similar to West of Shetland or Norwegian Sea

Maximum water depths of 2000m shallower than recent Gulf of Mexico 6000m wells

Most prospects within 500m to 1200m water depth range

Conventional wells: neither high pressure nor high temperature

Production vessels: FPSOs built elsewhere and sailed to Falkland Islands

Falkland Islands situated between two major markets: US and Asia

cynic

And i suggest you put EEN in your chart a Junior penny share in 2002 now ftse 250 and one of the top E&P performers.

emerald 7-year chart below ...... not a penny stock even 7 years ago, but adequate rather than stellar since then .... also, if you bought at the very beginning(?) at 120 you had to wait 2 years beforwe it even recovered to that price .... in fact, did not really pick up any sustained head of steam until about Q2 2008 .... cocnclusion - you could have done far better with your money even in the oil sector

and here's the 10-year chart for Emerald ... makes even less impressive viewing