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/

"FOGL announces its intention to conditionally place 43,478,261 new ordinary shares of 0.002 pence in the capital of the Company ("Ordinary Shares") at a price of 115 pence per share to raise 50 million before expenses (the "Placing"). The net proceeds will be used to fully fund FOGL's share of the costs of the planned drilling programme.

FOGL also announces that the joint venture between BHP Billiton and FOGL ("the Joint Venture") is in advanced discussions with Desire Petroleum plc ("Desire") to contract the Ocean Guardian rig to drill the first ever exploration well in the East Falklands Basin. Whilst discussions have reached an advanced stage, there can be no certainty that the Joint Venture will contract the Ocean Guardian. The Joint Venture intends to contract a deepwater rig for late 2010."

http://www.upi.com/Science_News/Resource-Wars/2009/12/10/Falklands-woo-Chilean-oil-companies-to-speed-up-exploration/UPI-34211260484632/

Falklands woo Chilean oil companies to speed up exploration

STANLEY, Falkland Islands, Dec. 10 (UPI) -- Falklanders' hopes of an imminent oil bonanza have received a boost after senior executives from a major exploration and production firm on the islands were reported in talks with Chilean oil companies to try and forge strategic partnerships.

Falklands Oil and Gas Ltd. is seeking Chilean partners because of Chile's
geographical proximity with the British dependent territory.

Industry analysts said the Falklanders' quest for strategist partners in Chile was a logical outcome of reports that the islands' basins have vast hydrocarbon resources that need to be exploited at speed to make the most of the current trend in oil prices.

There was no immediate indication if Chile would respond positively to the Falklands' overtures or would pass on the offer so as not to upset neighbor Argentina, which fought a war with Britain over the Falkland Islands in 1982. Argentina still claims sovereignty over the islands.

About 162,000 square feet of the islands' basin region in the South Atlantic is ripe for exploration. Scientific surveys have established vast reserves that could transform the islands into a major oil-producing region.

The current trend in prices is also conducive to attracting investors into the exploration project. However, if the prices drop amid continuing doubts about a global economic recovery, potential investors will have less incentive to get interested in an expensive drilling program.

FOGL's first port of call in Chile was the state-run Empresa Nacional del Petroleo, which, according to industry experts, has the expertise and resources to enter into a large-scale oil exploration partnership abroad.

ENAP made no comment about talks with FOGL Chief Executive Officer Tim Bushell, who visited the Chilean oil company officials in October.

FOGL sources said the Falklanders believe ENAP is the natural partner for FOGL because of geography and logistics.

ENAP already has successful gas operations in the Magallanes region, Chile's extreme south, and after 2008 losses of about $958 million is desperate for a turnaround.

ENAP lost heavily on importing expensive crude oil for its refining operations, so having Falklands oil in closer proximity will be an attractive prospect, analysts said.

FOGL has also made overtures to other oil companies in Chile but apparently not yet in Brazil, which has extensive experience in undersea drilling and also has cash to spare for overseas projects.

Meanwhile, Desire Petroleum said it planned a share issue of about $34 million to make use of the full potential of its exploratory drilling season, scheduled to begin in February 2010 with the arrival of the rig Ocean Guardian from Scotland.

Desire recently raised 40.2 million pounds by placing 60 million new ordinary shares. The funds, together with Desire's other cash resources, are designed to enable Desire to drill at least four wells.

Desire said it would use any surplus funds to test any successful wells or drill more wells.

Two other oil companies operating in the Falklands, Arcadia Petroleum Ltd. and Rockhopper Exploration Plc, are expected to drill two wells on their own initiatives. Arcadia is operating within Desire blocks and Rockhopper is active outside of Desire blocks.

The combined exploratory ventures mean that eight of 10 designated wells are now accounted for.

The Falklands government has said it will monitor the drilling operations closely to guard against damage to the islands' ecology, a source of tourism revenue.

Falklands Oil And Gas FOGL..... been doing the busines for a few days now. Was very suprised to see that the stock has a Beta (this is a oiley) below 1, in fact 0.7 so that suited me to the ground. Im not very keen on fast moving stocks.

Hi Goldfinger
,
The reason its a fast moving stock is that the Ocean Guardian will be spuding in the NFB about this time next month and it has been suggested The first two wells are expected to be on Liz and Sea Lion. This will be followed by a well on Toroa on Falkland Oil and Gas's* (FOGL) acreage with a rig agreement currently being finalised between Desire and BHP

So if they can come to a suitable agreement with Desire to use the rig you should be drilling between May and July.

It has also be suggested by Oriel that Toroa based on pre-drill estimates of 1400mmb would be worth c3400p/sh to FOGL
Now what i would like to see as part of Desire lending FOGL the rig is a percentage in the Toroa prospect.

I believe there are a few meeting going on this week and hopefully more news will be for coming soon.

Spot on Marky - except I don't think DES is 'lending' the rig! They are paying the going rate - and some - if indeed the DES / BHP deal is struck.

Given FOGL's innovative approach to the Chileans I think they deserve to keep what they find!

Hi marky,

re.. market movement

in fact its a slow moving stock with a beta of less than 1 so that attracted me to it.

Being a short term trader and not usually an intraday trader I dont go for any stocks over a beta of 1 which way outperform the market up and down.

So I was chuffed when I saw it had a beta of just 0.7 and reckon a lot of others have appreciated this.

cheers mate.

Broker BUY out late yesterday not much to go on though but a buy is a buy is it not. (link from hemscott premium)

Falkland Oil & Gas Ltd

FORECASTS
2009 2010
Date Rec Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)

Oriel Securities
12-01-10 BUY

From FT today: "at a Falklands OIl & Gas meeting yesterday Mike Bushell said BHP intent on sending a drill ship from west Africa or a semi submersible"

Avsec you quiet right about the word lending ....borrowing the rig on favourable terms for Desire meaning maybe a percentage in the prospect and cash.

Gold finger what is your graph telling you about Desire Petroleum as i can see 1.25p + by end of week.

Harry i bet he didnt give a date?

Marky, give me a hour or so and Ill post it up. (des)

Funnily enough got it across the road in my 2 top stocks for 2010.

cheers mate.

Glad I stayed in this, one with a positive future me thinks ! ; ))

dummy's 5-year chart indicates probable resistance imminent at/around the high-spikes

FOGL is a very strong buy.

At 177p??? Why?

BHP will be actively involved

very high volume here today, considering it was generally quiet ...... sp is now almost exactly on all-time high ..... keep watching

now.....almost......exactly.... which did you really want to use.......

The great potential will be recognised soon.

all of the above! .... better than "almost unique"!

They dont have a rig yet!!!!!They dont have any drill time table yet!!!!!