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/

BOR will have their EIS by December when they expect their 5th generation semi to arrive in the FI's.

Halifax look how long it took Desire to get a rig and BOR and FOGL need a high spec 5th or drill ship and you can double every thing up on costs.

Chav why was the EIS not passed but noted? Your 5th sub.......funny how i was told they were chasing a drill boat to be told they would have to wait 2 more years till it came off contract.

chasing there tail comes to mind and people chasing rainbows

Stick to the NFB for the time be you will see the rewards.

I'll be sticking with RKH for a while yet markymar! The service industry in the FI's have been briefed on the possibility of another Rig, for BOR, arriving in December, so news on that shouldn't be very far away.

I should imagine that the EIS is still with BGS getting checked over which is why it was only 'noted' at the last Exco meeting.

I fear that there is still room for a further drop for FOGL....as people will sell or switch.....until they get a rig...not much to go on except hope....

i agree; was very surprised to see upward tick today

Sorry...little mix up with MATD....coming back to FOGL.....another 20p drop or so to come over the next month....until this long awaited rig of theirs is booked...from what I understand : there are only 32 deep water rigs in the world so it has to be one of those...BP, to be the supplier when the Gulf shambles is settled ?.

surely BP leased in their rig .... in fact, i believe that is the general practice

http://en.mercopress.com/2010/07/13/deepwater-oil-rig-needed-to-drill-in-falklands-southern-waters-confirms-fogl


FOGL holds Falkland Islands government licences to the south and east of the Islands, a vast area that had never been drilled until the disappointing Toroa F61/5-1 which reached almost 2.500 metres in waters over 600 metres deep.

The two previous wells drilled in Falklands waters (Desire Petroleum and Rockhopper Exploration) as well as those of the 1998 round were concentrated in the North Falkland basin where the water depth ranges 200/300 meters.

FOGL Chief Executive Tim Bushell indicated that whilst the results of the Toroa well are disappointing, it has to be remembered that this is the first well in a previously un-drilled frontier basin.

He added that FOGL continues to work towards getting a deepwater rig so that we can drill our other prospects which are bigger and probably better prospects. In the meantime, we'll evaluate the data we have from this well to see how it can help us drill other wells.

The Toroa prospect is located in Licence PL15, in which FOGL has a 49% interest alongside BHP Billitons 51%. Originally the company was planning a two-phase drilling program starting at Toroa and then moving on to a deepwater campaign, which was expected to start in late 2010. Under the terms of its farm-in agreement, BHP Billiton is funding more than two thirds of the total cost of the committed two wells program.

There are very few rigs that can drill under harsh conditions, said a FOGL spokesperson. So it's impossible to say when that might happen. We had the current rig for only one slot.

The current rig Ocean Guardian was contracted by Desire Petroleum, which drilled the first well and the leased to Rockhopper Exploration that announced the discovery of oil at the Sea Lion prospect, and to FOGL. Although ideal for the North Falkland basin, apparently operating at 600 metres deep waters the rig is close to its potential.

Meanwhile oil company Argos Resources said it will join the Falklands drilling campaign after it completes an IPO to raise funds for the initiative, according to media reports.


BOR a sell

FOGL a sell

DES a buy and cheap at moment if you can wait 3 to 4 months, basin proven they will come good entry point.

RKH good value plenty upside to double or treble your money ..basin proven and new data will be better than first thought....come on the rock

Just shows how bad news always overshadows good news.

In yesterdays Telegraph Business, the Fogl failure was front page, with the heading, 'Falkland Oil and Gas falls as well proves dry'.
Fair enough, but where was the Rockhopper discovery when it was reported, which was far more important as regards the FI fields, it was tucked away inside.
Yesterdays report also contained comments such as, 'The setback is the latest in a series that has dogged exploration around the Falkland Islands. Forecasts that the area around the islands could hold up to 3, billion barrels of oil have appeared to date, to be wildly optimistic'.

As someone posted, "It took 7 dusters in the North Sea before they struck one with oil, so I think the Falklands is doing rather better".
Quite right to!

For those who have not kept a close eye on the FIO's they would on reading the very pessimistic Telegraph report think this was almost a too much to risk area of investing.
Where do they get the 'This is the latest in a series of setbacks etc', instead of stating, 'although very early in the campaign, the percentage of discovery/failure is better than the average'.

As already said, bad news always overshadows good news, and no doubt the Telegraph report will influence the potential investors to stay out.

Now for the obvious must be said comment......Fogl could end up making investors who are still holding or have bought in at the lower price, 'a nice little earner' as Delboy would say.
Of course the opposite could apply if they have anymore dusters.

But 'This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning'
Now where have we heard that before!

The 'bounce' continues - though I can't see why. Up 8% just now

There will be another possibly long wait until a rig is announced and then another wait until spudding....I cannot see them drilling before this time next year minimum...who's going to hang on to stock until then ?....very few...what with RKH and DES will have completed half a dozen wells before this lot even get going !.

this one looks like a busted flush to me, or at least for many months to come

http://www.oilbarrel.com/nc/news/display_news/article/fogl-crashes-as-its-maiden-well-comes-in-dry/860.html

July 14, 2010

FOGL Crashes As Its Maiden Well Comes In Dry





Shares in Falkland Oil & Gas Limited slumped 104 pence to 97.75 pence on Monday after its maiden well in the Falkland Islands came in dry. Some company watchers felt the sell off to be overdone after all, this was the first well in a virgin basin and there was some recovery on Tuesday, with the shares back up to 102.25 pence in afternoon trading.
Even so, this was a major disappointment for backers of the AIM-quoted company, which is pioneering exploration in the previously undrilled waters to the south and east of the Falkland Islands where is talk of a possible multi-billion barrel resource held in a number of massive structures. The geology here is completely different to the North Falkland Basin, where fellow AIM company Rockhopper Exploration recently struck oil with the Sea Lion-1 well, so FOGLs duster has no bearing on the prospectivity of the acreage held by Rockhopper and Desire Petroleum.

The Toroa F61/5-1 exploration well was spudded at the end of May and drilled to a total depth of 2,476 metres, short of the targeted 2,700 metres. The well, in which FOGL has a 49 per cent interest, took a little longer to drill than anticipated due to some minor operational issues and weather-related downtime. When the results did come in, logging revealed the well to be a duster.

This was disappointing: the Toroa well was targeting a prospect in the Springhill Sandstones, the proven play in the Argentine Magallanes basin to the west. The prospect carried potential unrisked mean reserves of 1.7 billion barrels and was supported by oil shows, a seismic amplitude anomaly and a positive CSEM response, demonstrating the limitations of these state-of-the-art imaging technologies: there is no substitute for the drillbit.

Despite the steep sell-off, its worth pointing out that Toroa was by no means the best pick of FOGLs prospect inventory (indeed, the company was aware of the high risk of failure with this first well, giving Toroa a 15 per cent chance of success). The selection of Toroa for the first well was driven more by the constraints of the available rig equipment and the need to drill before the first phase of the exploration licences expires in December 2010 than compelling geology.

Unlike the companys deepwater prospects to the east of the Falkland Islands, Toroa lay to the south with water depths and seabed conditions that could accommodate the Ocean Guardian rig that had been hired by Desire Petroleum to explore the shallower waters of the North Falkland Basin. This was the first rig to mobilize to these remote waters for more than a decade and FOGL was keen not to miss out on the opportunity to rig share.

House broker Oriel Securities put a brave face on the result, highlighting that exploration is at early stage in this large frontier basin with significant remaining prospectivity. Oriel analyst Richard Rose pointed out that the well had provided useful geological data which should help refine future prospects.

Even so, the disappointment will weigh heavily on the share price until FOGL and its farm-in partner BHP Billiton secure a deepwater drillship or semi-submersible capable of drilling the deepwater targets in the East Falkland Basin. As yet, there is no news on whether the search for a suitable deepwater rig is closing in on a suitable candidate the partners had planned to drill this year and there are now less than six months to go.

With profit taken on 5th @231, the current bounce to 113 allowed me to squeak out at break even overall.

However I do agree Cynic, that this is on the back burner for a long time - certainly until the rig acquisition is announced.

It is just a dead cat bounce... will fall back... take profit if you are in it.

have shorted instead (113.25), but not easy to borrow the stock to do so

Not a bad idea.....just have be careful about rig availability.....

You were lucky to get that price!

ah well, that's the advantage of direct dealing through L2