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/

only relaying what was said on news, don't shoot the emu.....cynic would be lonely..

I was fairly happy with the Falklands situation, until I saw the comment, 'Gordon Brown says UK is prepared in Falkland Islands'.

Now I am worried!

storm in a tea cup ! Just a bit of Muscle Flexing, Dont get to worried Just yet !............... :)

is that why DES directors sold approx 10 million shares in DES between 3 of them last week ??

Looking at the rising sp perhaps they wish they hadn't.

They know, as was posted earlier, the probability of success is approx 20%. Anyone sitting on big profit would be very wise to lock some of that in, imo.

Linked article seems to accurately sum up the naval assets in the area.

Just heard on the BBC News during a storyline on the rig starting to drill, the comment, 'It won't be long before the first barrels of oil change the Falklands forever.

Well if the BBC are sure there is oil there!

I remain positive greekman and hope to make a bit here and on DES but there are so many things that can go wrong,... still early days So hold off buying that holiday Villa !! unless its on the Falklands so keep any eye on proceedings ; ))

Hi Smiler,

Yes, like you, confident but wary re things going wrong. To my mind, I think this is a healthy attitude.
Villa on hold!

Business Financial Newswire
"Falkland Oil and Gas Ltd posts pre-tax losses of $5.5m for 2009 - up from $1.2m last time - but believes 2010 will be a momentous year for the company.

Chairman Richard Liddell said 2010 would see the culmination of the work undertaken since the company was founded in 2004, with the commencement of exploration drilling in its licences.

The firm had a cash balance of $93.5m at the end of December compared with $18.8m at the end of 2008.

It said placings raised a total of 57.6m and the 'Ocean Guardian' rig had been secured to drill the first ever exploration well in the East Falklands Basin "

Been in FKL for several months, now decided to have an investment directly in one of the oil explorers, so just bought Fogl.

http://www.independent.co.uk/news/business/news/falkland-oil-and-gas-has-funding-in-place-1914167.html

From a very lefty publication, but very interesting if you have the time to wade through it.

I have my own views but will leave others to decide how much fact/truth/fiction is contained in the article.

http://21stcenturysocialism.com/article/who_owns_the_falklands_01968.html

Interesting article re clumsy Clinton.

Hillary Clinton's Cold War Strategy Didn't Work in Brazil

http://www.brazzil.com/component/content/article/217-march-2010/10367-hillary-clintons-cold-war-strategy-didnt-work-in-brazil.html

Gordon's Armada in peril.

http://www.yorkshireeveningpost.co.uk/letters/Gordons-Armada-in-peril.6134291.jp

Although the article has serious implications, I thought the tone might lighten the mood a bit.

Rather static these days - probably awaiting the outcome of the DES / RKH exploration.

Well someone is still confident.

Investec Asset Management Ltd increase holding from 7,242,666 to 7,666,666.

OK not a huge increase by any means but still an increase.

Still going well from 120 to 152 (17%) in just over two weeks whilst DES and stick around 50.

FOGL seems to have woken up today..........

Bit of a lagger....... but waking up anyway.