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/

Cynic
Unless I am mistaken, FOGL drilled Toroa to satisfy their licence requirements but without a strong chance of success in the South Falkalnd basin.When it dusted there was the initial drop but the longer term view is that the drilling has derisked some of the future exploration.

Bushell's statement:

"Whilst the results of the Toroa well are disappointing, it has to be remembered that this is the first well in a previously undrilled frontier basin. We believe that these results have helped to reduce some of the key risks of the plays in the deepwater areas of our licences."

adds to that view - but he would say that wouldn't he?!

i'm very dense, but why would drilling a dud de-risk anything?

I don't understand the finer points of oil exploration and am clutching at straws but maybe it is just a bit more information to put into the equation.

At least they know there is nothing in that immediate area but when added to the other surveys could help determine where to drill next.

Good start for FOGL......hope you went long cynic

not in this at all .... see my comment just posted on ARG

Could all be huff and puff about this rig but even with a rig its all huff and puff....and a lot of hope mixed into the factor.

RKH awaiting news on upgrades....hoping news within 8 days before AGM

DES should spud Monday.......news within 30 days of spud

AGR a long way to go to catch up...need 3D

FOGL and BOR need a rig.....which they havent as yet!!!

Time to keep your feet on the ground and a clear head.

which all confirms my belief that i have done the right thing today by reducing my exposure further in both DES and RKH

Happy to wait for RKH RNS & DES spud when I think the sp's will spike & then settle back. Will probably then bank a portion of my holding.

If there is a good upgrade on what RKH are sitting on, they will all go up hence i am very happy sitting back waiting for upgrade news, as if its as good as i think the price could double or treble RKH current price.

They will need an appraisal well to fully confirm the size of the discovery with perhaps several more which can be used for production purposes. This will happen but perhaps not until the spring.....in their last rns ; it said it was in line with their expectations.....I've forgotten how many barrels that is....(a lot)......How do you know if there will be an upgrade if they have confirmed that it is in line ?...

I expect DES's sp to drop on spudding....this happens all the time to oilies....

RF am expecting an upgrade on reserves before AGM as to my question at AGM and I would like to think they would like to give some good news before AGM, RKH will have to raise an a substantial amount of money in the short term to be able to do a full appraisal on Sea Lion and carry on drilling further targets in their acreage.

For this to happen they will want the share price as high as they can get as beneficial to all.

One thing for sure that rig isnt going any where, if any thing depending on DES if they hit lucky RKH might have to bring their own rig to the Falklands to carry on working.

Very early days in a frontier province with many different scenarios this could come in to play.

Looking forward to AGM to hear future thoughts and plans from RKH

Sam is the man with a great team behind him and never put a foot wrong yet!!

Thanks marky....Cynic, how is the short or you must have closed it....can't understand why this is rising...

have left it running ..... it's a fairly modest number (as with ARG), and like you, to me the rise defies belief

Perhaps in talks with BP or BG or Petrobas over a rig..and a few leaks to people in the city...could be...

but even then, sort of so what?
as far as i can see, they are drilling blind, and that is as and when they even get a rig

It will be at least 8 months from the time announced....

Don't get too hooked up on Petrobras, rf. Looks like the brazilian government are forcing them to accept a larger state intervention/holding in order to ensure that Petrobras activity & profits are centered on the domestic market. I don't think they will be looking overseas atm.

Thanks all...will have to log off for a bit till this afternoon....work calls....

FOGL, the oil and gas exploration company focused on its extensive licence areas to the South and East of the Falkland Islands, announces certain changes to its licence arrangements with the Falkland Islands Government.

Northern licence area

"Due to the tight rig market it is increasingly unlikely that the next phase of the drilling programme will commence in 2010 as required by the current terms of the licences. Following recent discussions, the Falkland Islands Government ("FIG") has agreed to extend the first phase of the northern 2004 licences by one year, so that they will now expire on 15 December 2011. No additional work obligations or acreage relinquishment will be required in respect of this licence extension and the existing Phase 1 work commitments remain unchanged.

Southern licence area

Separately, BHP Billiton has advised FIG and FOGL that it has elected not to enter the second phase of the southern 2002 licences which commences on 3 December 2010.

FOGL believes, based on the drilling results from the Toroa well analysed to date, that these licences are still prospective. Furthermore, we are still awaiting the analysis of some key well data and these results are now expected to be available in October. FOGL has identified a number of prospects and leads which may prove to be of interest, particularly in the event of drilling success in the deepwater area of the northern licences, or in the south, where the licences are contiguous with acreage held by Borders and Southern Petroleum.

Having fulfilled all the work obligations of Phase 1, FOGL has therefore decided to enter the second phase of these licences. This will entail the drilling of a single exploration well by 3 December 2015. BHP Billiton will assign its 51% licence interest to FOGL which takes FOGL's interest back to 100%. FOGL expects to take over the operatorship of these licences during the next few months."