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/

start drilling at the end of 2009 .... so why buy now, if at all?

why should there be a shortage of rigs in 2009 with oil under $50?

Cynic,

Timing, timing and timing. Not saying I know when it would be the best time to buy (if only) but as the drilling timetable gathers pace the sp will rise on that alone.

Halifax,

Because no one knows when the price of oil will reach $100 plus again, but IT WILL. The big problem oil companies have is knowing when the oil price/demand will spike. Oil companies have to try to read the future of the next 2 to 3 years minimum.
What price of oil if the Middle East really does boil over.
Even if demand continued at its present level, supply will not, therefore although demand will always lead supply/price, we are always nearing that day when supply can not keep pace.
I can not remember when there was not a shortage of rigs.

Greek.

i agree with your first statement.
however, do not lose sight of the fact that FOGL and a myriad of others E&Ps have not actually found any oil, let alone started to extract it, so the price of crude has only limited value to them.
also, FOGL is not scheduled to even start drilling for another 9/12 months

Morning Cynic,

As you say no oil found yet. I am not one to think there is definitely gold in them there hills (or oil under them there seas) but I feel the price/risk is a very good bet, and that is exactly how I look at it one big gamble for a very good prize. Of course there could be nothing at the end of the proverbial rainbow, that is why I only have a very small slice of my Portfolio invested.
Note... If I was not a holder in FKL/Fogl or any connected to the Falklands, I would not buy now, but would play a wait and see strategy, not leaving it past mid year though. Obviously a personal view.
Full of 'Metaphors' this morning.

Aye to do tend to agree greekman, but I still think from here you will see a slow tic up in hope of some action in 2009 ? we will see ; )

http://www.falklandnews.com/public/story.cfm?get=5287&source=3

Gerald Cheek mentioned that a drill ship was in Falklands waters. Cllr Hansen said it was doing a sight and seismic survey and Cllr Clausen mentioned they drilled 3 holes at 300 metres deep. Cllr Summers said that BHP Billiton were very low key about it. Two representatives from the industry would be in the Falklands in due course and more could be known then.

no one will be much interested in spending heavy exploration money in these waters until there is some significant sign of a sustained upturn in world economies and the oil price

However looking at the longer term rig availability should ease if the oil price remains around $50. BHP/BLT can certainly afford to drill and probably think the risk is worth taking, otherwise why buy into the FOGL story?

i don't!

good,buy Rkh OR Des and tuck them away for a year tops!!

have TLW and HOIL which are doing very nicely

Morning Cynic,

The biggest problems the oil industry has is not knowing the future demand/price of oil. But they can not leave investing in exploration until prices move to a higher profit, lower cost margin, purely due to the fact that the time span from committing mega bucks into exploration, to pumping oil can be many months/years. The time span being far longer regarding sub sea field drilling than those on terra ferma.
They have to gamble big now to build in possible future high profits.
If they leave it till there is a sustained upturn in world economies and oil price rise, they will be at least a couple of years too late.

your logic may be right, but the facts show that new exploration etc has ground to a complete halt ..... that is why companies like PMO, TLW, HOIL and others with proven reserves are even more likley to be swallowed up - i.e. their sp is currently depressed for obvious reasons, and there is no risk to the predator of failing to find oil

Get your point. I know Shell is being more selective where it is investing it's exploration money, so no doubt others are also. They appear to be aiming investment at those fields where the profit margins are higher due to easier access. Lets just hope the info from the Falklands area makes it worthwhile to pump (no pun intended) sufficient money in.
So your point is taken, but for the reasons of your last post more than the previous one, IE selectivity and not so much price/demand.

Completion of Site Survey Programme
FOGL, the oil and gas exploration company focused on its extensive licence areas to the South and East of the Falkland Islands, is pleased to announce the successful completion of the site survey programme.

The MV Fugro Meridian conducted site surveys in four areas that were jointly selected by the operator BHP Billiton and FOGL. The vessel, which is operated by Fugro Surveys Limited, acquired high resolution 2D seismic data in order to assess drilling hazards in the top few hundred meters of sediment below the sea bed. Bathymetric and sea bed imaging surveys were conducted to generate a detailed picture of the sea floor. The data can then be used to assess sea bed stability, locate sites for rig anchors and provide a picture of potential sea bed habitats. In addition numerous gravity cores and grab samples of the sea bed were recovered to calibrate the sea bed imaging and provide accurate data on sea bed composition and local fauna for inclusion in the environmental impact assessment. The surveys were completed last week.

The British Antarctic Survey vessel, the James Clark Ross, was contracted to deploy wave and current meters. Data from these instruments will be used in the environmental assessment and in the design specifications for rig mooring and riser design. This deployment was completed in December but the monitoring is ongoing.

A geotechnical boring programme was also undertaken, by the MV Fugro Saltire, to establish the composition and physical properties of the top 200 metres of sediment below the seabed. Information derived from this survey will be used to assist in the detailed conductor and casing design of the wells.

The Company will now utilise the data acquired in the surveys to undertake detailed well designs which will then form part of the regulatory approval. The site survey data will also be utilised in the environmental impact assessment that will be submitted to the Falkland Islands' Government in the coming months."

Harrycat,

Good find (where did you find it). Taken my eye off the ball a bit re FOGL as one tends to when all goes quiet for a while. Still being as patient as needed re oil exploration time tables.

Greek.

CEO Bushell commented that the site survey completes the off shore phase before drilling commences.

FOGL, the oil and gas exploration company focused on its extensive licence areas to the South and East of the Falkland Islands, announces unaudited Preliminary Results for the twelve months ended 31 December 2008.

Highlights
-Site survey programme successfully completed

-Regulatory submissions and environmental impact assessments being prepared

-Four initial prospects for drilling identified, with combined potential mean reserves of over 8 billion barrels (unrisked)

-On track to be 'drill ready' during Q3 2009

-Formal farm out process initiated

-Cash balance of $18.8 million as at 31 December 2008 (2007: $24.9 million)

Richard Liddell, Chairman of FOGL, said:

'The focus for FOGL in 2008 has been on the preparatory work for the forthcoming drilling programme and we expect to be 'drill ready' by the end of the third quarter this year.

'BHP Billiton is actively seeking a suitable drilling rig and the deep water rig market is improving. Ultimately, the availability of a suitable rig will determine the timing of drilling although we currently expect that the drilling programme will commence in late 2009 or early 2010.'

still a long long way in money, and time before anything at all is established