.

Pro - For once I would like a non-biased view!

don't think that would be possible from anyone
my own uneducated guess is that, as the usual chances of hitting oil are reckoned at little better than 4:1 or perhaps 5:1, then FOGL's odds are 7:2 at best and it could easily and justifiably be argued that they are no better than 11:2

The odds are reduced with the sheer number of wells.....third one up now.....and there will be a fourth......it's the seismic showing that is interesting.....might be a massive gas discovery......this is not too far away from Sealion.....I mean it's a gamble,,,, but boy !..is there upside or what if a strike is made.....?...

cynic

Don't the odd's become better the more holes you drill and what area you are drilling in ?

From the Daily Mail........Very interesting!

INVESTMENT EXTRA: Troubled waters of the FalklandsBy Ian Lyall
PUBLISHED: 22:17, 20 July 2012 | UPDATED: 22:33, 20 July 2012

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The past two weeks have revealed the make-or-break nature of exploration in the waters off the Falkland Islands, one of the world’s most remote and treacherous oil frontiers.

Success has translated into a bumper $1billion (£639million) deal for Rockhopper Exploration, failure saw 70 per cent wiped from the value of rival Borders & Southern in one brutal day of trading.

Exploration by UK firms Shell and Lasmo in the late 1990s pointed to the existence of significant quantities of oil and gas in the area.

Final frontier: As established oil reserves continue to decline, explorers are hoping to cash in on the Falklands
However crude prices were at a very low ebb (their lowest level in a quarter of a century, in fact) making it impossible to establish a sound economic case for further exploration of the area at that time.

So it took until February 2010 for exploration to restart.

In all, five companies operate in the area.

Three of them – Rockhopper, Argos Resources and Desire Petroleum – are in the northern basin.

The other two, Borders and Falklands Oil & Gas, hold acreage in the deeper and more technically challenging waters in the south.

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It is interesting how the landscape (or should that be seascape) is shaping up for the current wave of independent oil companies.

There is a north-south split, with the former yielding the most tangible evidence of commercial oil. Exploration of the southern basin has been hotly anticipated, particularly as seismic surveys suggested that five of the seven biggest Falklands oil prospects were in this area – and that they were potentially world class.

But the two latest holes made in the southern basin have shaken the optimism that accompanied the arrival of the giant Leiv Eiriksson drill rig earlier this year. They point to the area being the source of gas and gas condensate, but not oil.

This is rather disappointing. Gas is a far less commercial proposition than oil in this context.

If it had been found in the North Sea then there would a ready market. But it is far more difficult and costly to commercialise these finds when they are stranded in the choppy waters of the South Atlantic.

It means investors are having to recalibrate expectations.

The Leiv Eiriksson moves on to the Falklands Oil & Gas acreage next, and the Loligo target in particular.

With prospective resource of some 4.7billion barrels of crude, it is the biggest drill target anywhere in the world this year, according to Edison Investment Research. And if it lives up to its billing then it would be ten times the size of Rockhopper’s Sea Lion field, which generated the $1billion deal mentioned earlier.

So the potential reward is huge. But also remember – the chance of success is put at just one-in-five.

Rockhopper, meanwhile, is showing how it is done by bringing in Premier Oil on Sea Lion.

The FTSE 250 group is acquiring a 60 per cent stake and operatorship of Sea Lion with an initial payment of $231million (£147million). It has also agreed to pay exploration and development costs running to $770million (£492million), with the plan of bringing the field into production by 2017.

In Premier, Rockhopper has landed a partner from the oil and gas industry’s second tier, prompting questions as to why one of the majors wasn’t willing to commit to the area.

Although tensions between the UK and Argentina over the sovereignty of the islands may have been one off-putting factor.

Indeed, Premier’s chief executive Simon Lockett admitted to thinking ‘long and hard’ before finally pressing the go button on the deal.

‘Our conclusion was that this is a risk worth taking,’ he said recently. ‘It would be foolhardy of us to dismiss the risk as nothing.’

It is interesting to note that the Falklands could generate tax and royalties of around $180billion (£115billion), according to research carried out earlier this year by Edison.

So the area’s potential is huge. Whether we see it fully realised is another matter.


Read more: http://www.thisismoney.co.uk/money/investing/article-2176688/INVESTMENT-EXTRA-Troubled-waters-Falklands.html#ixzz21NksoriJ

When is the bloody Leiv Eiriksson rig coming??????????????????????

I don't get it, if there's 4.7 billion barrels guaranteed recoverable oil, then why is there odds of only 4/1 ????????????????????

For those who want more technical detail on the well, see link below :

http://boards.fool.co.uk/for-those-who-require-more-technical-details-on-12604084.aspx
.

there most assuredly is NOT " 4.7 billion barrels guaranteed recoverable oil" ...... it seems to have escaped your notice that but FOGL hasn't found $4.7-worth yet

And if they do find anything, it will take 3-5 years before any production gets underway.

Somebody tell RF that.,.

BD - the production bit is relatively unimportant ..... it's FINDING commercial quantities that will trigger ..... IF commercial quantities are found by FOGL, then the whole dynamic of the FI region changes, together with that of all companies involved.

Fair enough, but the value of the finds is related to the amount of oil and the cost/barrel of extraction.

yeeeees, but a good find will change general sentiment for the region dramatically, and specifically the perceived value of any company that actually has the stuff - e.g. FOGL and RKH, always supposing ......

Hi Blackdown,

Fully agree with Cynic on this (unusual for me).
If you are going to invest in any oil explorer, the time from find to production is just about the only thing you can have a decent idea of time scale.
If the intention is to hold long, till production, that waiting period should always be part of the investment calculations.
I do though, agree with your last comment,"But the value of the finds is related to the amount of oil and the cost/barrel of extraction".

I am sure that another significant find off the FIs will change things. However, wild estimates of sp (mainly from Pro) of £30+/share post drill are absurd.

of course they are - totally preposterous; divide by 10

prospective resource of 4.7 billion

which means "finger x-ed chaps; let's hope we manage to find even a can-full"

Could I be so bold and ask a question?

Not related to any share in particular........Why is it, when there are more "Buyers than Sellers" a share price goes down in value....strange to me....That's not hard!

Back to the Falklands......I agree with aldwick........Prospective resource of 4.7 billion.