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/

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!!!!!

precisely, and even though DES has same, they haven't actually found anything yet ...... hence my caution by top-slicing (DES) on friday

The South basin has never been drilled and is totaly virgin,the big diffrence is in the North basin Which Desire hold and Rockhopper has been drilled

1. Only one basin has been drilled the North Falkland Basin.

2.There are six wells in total in an area half the size of Texas.

3.The wells were drilled back to back, with no time for thought in between.

4. All six wells tested the same play.

5.Five had shows one flowed live oil to surface, one flowed gas to surface from a deeper source.



http://www.falklands-oil.com/

Share trading frenzy feeds rumours over Rentokil bid
20.01.10



After yesterday's Cadbury excitement, it was a sluggish session on the stock market today and most attempts by dealers to drum up business met deaf ears but one stock in particular was making noise.

As the rumour mill churned, it was a sharp movement in Rentokil stock that excited the professional day traders.

Bid rumours around this stock aren't new, but they were persistent today. More than seven million shares changed hands in early trading alone more than twice what is normal for the stock.

That could just be because investors have realised that cold weather always leads to more business for pest control companies as rat infestations soar.

One dealer, who insisted he wasn't merely talking up his own book, reckoned there could be more to it.

That's big volume and the deals are by some savvy buyers, I'd keep a close eye on it, he said. The shares gained 3.5p to 120.1p.

Elsewhere, volumes were light and the phones weren't ringing. In such an environment, some people will believe almost anything.

There is going to be a war with Argentina, said one broker grimly.

That could be the only reason, he reckoned, for the sudden plunge in the Falklands Oil & Gas shares of which he is irredeemably long. Economic unrest. New Tory government, it's a matter of inevitability, he reckoned.

It is true that Argentina has just unveiled a new law that defines the Falkland Islands as part of its territory something the UK has said it firmly rejects and the dispute is largely to do with who owns natural resources.

While that's unlikely to lead to war, there are implications for some stocks. Falklands Oil and Gas has had an extraordinary run, up 30% so far this year. It hit a new high yesterday evening of 173p, but slumped today by 12p a tumble of 7% to 161p.

http://en.mercopress.com/2010/01/21/bhp-billiton-confirms-oil-exploration-commitment-in-falklands-waters
Thursday, January 21st 2010 - 4:12 am UTC

BHP Billiton confirms oil exploration commitment in Falklands waters
BHP Billiton Ltd., Australias biggest oil and gas producer, boosted its forecast for petroleum exploration spending by 33% because of an increase in drilling in the US Gulf of Mexico and offshore Australia.

The corporation also anticipated that exploration over the next several years will focus on drilling wells in the Gulf of Mexico, Malaysia, Australia, Canada, Colombia and the Falkland Islands, BHP said in the report.

BHP, also the worlds largest mining company, expects to spend 800 million USD on oil and gas exploration in the year ending June 30, 200 million USD more than previously projected, the Melbourne-based company said in a statement.

BHP is drilling wells in the Green Canyon area of the Gulf of Mexico, the Sandakan Basin southwest of the Philippines, the Gippsland Basin off the Victorian coast of Australia and Canadas Laurentian Basin, according to the release.

The corporation expects to drill 25 exploration and appraisal wells in the next three years, BHP said in a 2009 annual review posted on its Web site. During that period, we are positioned to begin the strongest exploration drilling program in the companys recent history, J. Michael Yeager, chief executive officer of BHP petroleum unit, wrote in the report.

Petroleum exploration spending for the year ended June 30, 2009 was 548 million USD, the company said in an annual report. Spending in the six months ending in December was 200 million.

BHP first-half petroleum production increased 17% to 79.6 million barrels of oil equivalent, bolstered by output gains at the Shenzi field in the Gulf of Mexico, the company said. Second-quarter output climbed 16% to 38.4 million barrels of oil equivalent.

The Australian corporation said last October it was on target for 10% annual growth in petroleum output in the year ending June 30. Annual increases of 10% through June 30, 2011 remain the companys goal.

BHP Billiton has an interest in 14 exploration and production licenses offshore the Falkland Islands in the South Atlantic. The Company signed contracts with Falkland Oil and Gas Limited (FOGL) for rights to explore and, if successful, eventually produce oil and gas from the East Falkland Basin located off the southern and eastern coast of the Falkland Islands.

BHP Billiton holds a 40 per cent interest in the acreage and is the designated operator. Falkland Oil and Gas Limited hold the remaining 60 percent interest. The production licenses cover approximately 18 million acres and are located in water depths ranging from approximately 656 to 6,570 feet (approximately 200 to 2,000 meters).