RNS Number:7745L
Global Petroleum Ltd
03 May 2005

3 May 2005

Global Petroleum Limited ('Global')

ANNOUNCEMENT RE: FALKLAND OIL AND GAS LIMITED

Global Petroleum Limited (AIM / ASX: GBP), an Australian-based oil and gas
exploration company, advises that Falkland Oil and Gas Limited (FOGL) made the
attached release on the 3rd of May 2005.

This announcement suggests that Global's 16.06% shareholding (i.e. 12.848
million shares) in FOGL could potentially have quite significant value for
Global shareholders. A FOGL share price of #1/share translates to approximately
19c per Global share (GBP 8p/Global share).

Further information about FOGL's Falkland Island Oil & Gas Project can be found
in a presentation that FOGL has posted on its website www.fogl.co.uk

Further information:

Global Petroleum Limited
Dr John Armstrong, Executive Chairman +61 (0) 7 3211 1122

Bell Pottinger Corporate & Financial
Nick Lambert +44 (0) 7811 358 764

Tuesday 3rd May 2005

Falkland Oil and Gas Limited

("FOGL" or "the company")

Significant increase in number of identified leads

Enhanced possibility of a new petroleum province
in the South and East Falkland Basins

FOGL announces that it has completed its current 9,450 km 2D seismic data
acquisition programme over most of its licence area. The initial interpretation
of the preliminary processed records from the survey has proved encouraging and
greatly exceeds the Company's initial expectations.

The programme has indicated a larger and more diverse project than originally
anticipated and has identified numerous possible drill targets, with indications
that some could potentially be of significant size.

FOGL has now identified approximately 130 leads,(1) far in excess of the eight
(8) leads identified at the time of its AIM IPO in October 2004. Given the
positive results of the survey, FOGL now plans to increase the scope of its
exploration programme far beyond that envisaged at the time of the IPO.

Key points:

* Approximately 130 leads identified, a number of which appear capable of
containing recoverable reserves in excess of 200 million barrels

* FOGL now represents a larger and more diverse project than originally
anticipated

* Encouraging signs that oil and gas could be present

* Further work is planned targeting defining 20 drillable prospects by
about mid-2006

* FOGL is targeting drilling of the first well in 2007

* Already an enhanced possibility of project success

* Licences cover area equivalent to the North Sea Southern Gas Basin and
Central Graben

* Cash position of #10.9 million as at 31 March 2005. FOGL is evaluating
its funding requirements and the source of funds for the increased exploration
programme

John Armstrong, Executive Chairman of FOGL, said:

"In my opinion, this is the most exciting project I've seen for many years. The
results of the 2D seismic are encouraging; the number of leads identified has
far exceeded our most optimistic estimates and we believe it has greatly
enhanced FOGL's prospects. It is clear that the scope of work needed to maximise
the potential of our acreages has increased significantly.

"It is important to remember that, while the leads identified to date each have
seismic expression which indicates the possible presence of a drillable
prospect, when fully mapped, and with the benefit of further data, such leads
may not have all the characteristics necessary to become drillable prospects.
Nevertheless, the large number of leads distributed across several playtypes
suggests that a number of the leads could become technically sound and
potentially economically viable drill prospects. It is the Company's goal to
identify and define 20 such prospects in the immediate future so that they can
be considered for drilling in 2007.

"We have made a lot of progress in the six months since our AIM IPO and the
results to date have been remarkable. Although there is a long way to go, it now
seems quite possible that the Falkland Islands could become a new petroleum
province by the end of the decade."

Hydrocarbon Indicators

Initial interpretation of the new data gives considerable cause for optimism.
The preliminary results of the survey identify numerous Direct Hydrocarbon
Indicators (DHI's) pointing to the presence of working petroleum systems. The
DHI's include gas chimneys, amplitudes and possibly gas hydrates. The leads are
large and diverse, with some leads possibly covering areas of 300 to 500 sq km,
sufficient to hold large reserves of oil or gas. There is also a wide range of
play types with several different styles identified.

Exploration Programme & Funding Arrangements

FOGL plans to conduct further seismic surveys targeting all the leads but with
particular emphasis on the approximately 50 most promising. The aim will be to
develop 20 high quality, technically sound and potentially economically viable
drilling prospects. The Company then intends to develop a multi-well drilling
programme which may be able to begin in 2007.

Full details of the exploration programme are still to be finalised but given
the increased number of identified leads the company expects to expand
significantly the scope of the exploration programme.

Although FOGL had net cash of #10.9 million as at 31 March 2005, the increased
scope of the programme will require additional funding and the Board is
currently considering its options. A further statement on the funding
arrangements and the full details of the programme will be announced soon.

Potential Resources

The extent and depth of the basin suggests that, if it exists, the hydrocarbon
resource could be of a major scale. According to estimates by MBA Petroleum
Consultants, an independent consultant, 1,250 billion barrels of oil / oil
equivalent could have been generated in and in the vicinity of FOGL's licences.

Scott Pickford, petroleum engineers, made an independent assessment of the
initial eight (8) leads and concluded that each had the potential to contain
between 200 million and 600 million barrels of recoverable oil(2). It is
expected that Scott Pickford will be contracted to repeat the process and make
an independent judgement on the potential resources indicated by the new data.
Its findings will be announced on completion of the processing and
interpretation which is expected to be in the third quarter of this year.

An overview presentation will be posted on the FOGL website giving a summary of
the results announced here. Technical information including maps and seismic
lines will be posted on the Company's website in the near future.

www.fogl.co.uk

Enquiries:

FOGL

John Armstrong, Executive Chairman + 61 (0) 7 3211 1122 (+9 hrs GMT)
David Hudd, Deputy Chairman 07771 893 267

College Hill
Ben Brewerton 020 7457 2020

(1) a 'lead' is a feature that requires further technical appraisal prior to a
decision to drill

(2) P50 recoverable oil as estimated by Scott Pickford, a consultancy
specialising in geology, petroleum engineering and economic analyses, in 2004
(IPO Prospectus)

NOTES TO EDITORS

Falkland Oil and Gas Limited ("FOGL") is an oil and gas exploration company
focused exclusively on opportunities offshore of the Falkland Islands. It was
admitted to London's Alternative Investment Market ("AIM") on 14 October 2004 at
an issue price of 40p. The current major shareholders of FOGL are: Falkland
Islands Holdings plc (18%), Global Petroleum (16%) and RAB Capital plc (31%).

At the time of the admission to AIM, FOGL held a 77.5% interest in seven
offshore production licences covering approximately 33,700 sq km to the south
and east of the Falkland Islands. FOGL holds these licences in a joint venture
with Hardman Resources. In December 2004, FOGL was awarded a 100% licence over
an additional 50,000 sq kms adjacent to its existing licence areas. The 83,700
sq km area held by FOGL is equivalent to 380 North Sea blocks: as large as the
Southern Gas Basin and the Central Graben combined.

www.fogl.co.uk

This information is provided by RNS
The company news service from the London Stock Exchange

END

Offshore Kenya,eh?

I was on the first ever offshore well there (as far as I'm aware) just over 20 years ago. Challenging as far as I remember!

Did you find any hydrocarbons, though?

Big Al, do you know what vessel is drilling for them?

Big Al

Please cast your eyes over this and tell me if you have an opinion you can share?


Taken from TMF poster is SW10 who knows a thing or two.

Humm...

(A cynic writes)

The essence of this remains: "Our vessel was never actually designed for exploration drilling operations" - to which you might add: "but we thought we'd give it a go because we get to shake-down our vessel whilst someone else pays the bills."

It's too new

Before arriving on-site with our research-cum-exploration vessel, it will have drilled one test hole with a riser and BOPs; presumably have run one cement job and had its first experience of wireline operations. Ambitious? Well, even new exploration rigs have to start somewhere. But at least they're designed for purpose. Chikyu hasn't even got a track-record in drilling research holes.

It's the wrong design

So, how are things going? Current (Aug 14th) quotes for the shakedown include "eventful and exciting", "there have been many technical challenges" (see http://www.jamstec.go.jp/chikyu/eng/news/20060814.html). Not surprising perhaps; that's what shakedowns are for after all. And how many of these "eventful and exciting challenges" will be ironed out before the vessel starts drilling in earnest in Kenya?

(It's also notable that all the reported discussion appears to be centred on research rather than getting-oil-out-the-ground.)

The conversion remains unproven

And what's this from JAMSTEC? "The Chikyu will conduct its first riser drilling as well as targeting to 2,200 meter below the sea floor, the deepest scientific drilling depths through the sea floor ever recorded in the history." Eh? Shome mishtake shurely? I make that about 7200ft. It might be a record in the scientific drilling books (not my area), but I don't think that's going to impress many on a deepwater drillship.

The downright experimental approach to all this becomes more evident when you note that the Kenya and Australia jaunts are described thus: "Subsequent shakedown cruises for operational testing ... are being planned in cooperation with other institutions to enable Chikyu personnel to master as much drilling technology as possible."

The crewing will be a problem

Er, master the drilling technology???

I'd thought the drilling will be done the experienced Norwegians from Seadrill. But will it? Seadrill have only got one drillship; the West Navigator. What are they going to do -- pull the crew (and more importantly, the drillers) from there? I don't suppose Shell would be much amused by that approach. So where's the experience coming from to drill a decent exploration well with a brand-new rig?

SNAFUs will abound

SW10's Law is going to apply in spades on this one. As well as the standard contributors of Mother Nature, geology, people and technology the additional ingredients as I see them in this case include:

* Brand-new vessel;
* Vessel backward-converted to exploration vessel (I imagine this includes addition of shale shakers, wireline and mud-logging units, cement units, additional staroage space (mud, cement etc). I would mention riser-handling equipment too, but I seem to recall Chikyu had been built for that?
* Lack of vessel experience on the drill floor
* Lack of exploration experience on the drill floor?
* Culture clash (research vs. exploration)
* Culture clash (anyone for Aussies vs Japanese vs Norwegians?)
* Dual - and conflicting - missions (vessel shakedown vs commercial drilling)

Good luck to all whose money sails in her. I'll stay on the quay for the moment.

SW10

http://boards.fool.co.uk/Message.asp?mid=10130158&sort=whole#10137864

I was on board this till they got the rig!

Apparently it is nearly as big as the Titanic

soul traders

We found nothing of commercial interest. However, we had interesting problems setting anchors, losses in top hole which led to a 2-stage cement job and then some massive pore pressure increases which required a lot of time and effort to deal with. Please bear in mind this was 20 years ago and the well was a complete wildcat. Unocal was the operator and we were not very far offshore. I do remember it was fabulous to crewchange out of Mombasa - I'd spent the previous 2 years in Nigeria!!!

I'll think about this rig thing, sww. I'm a little confused by the above post.

Thanks for replying so far Al.

sww

Followed the links to the Chikyu site. Purpose-built drillship for taking deepsea cores by the look of it. It's definitely got all the mod-cons and wouldn't be difficult to go drilling for oil and gas from what I can see.

There's a lot worse out there, believe me!! That's especially so since utilisation is so high. As for the language thing, my current rig probably has 5 or 6 different nationalities onboard. It's always been that way and not an issue IMO.

Not sure why everyone is so upset.

Al.

Thanks for your reply, it has to be a lack of knowledge that has caused the disenting voices.

I admit I know little about this, there is nothing like having first hand experience in these matters which is why, when I saw you had looked in, I asked for your opinion which I take as being fair and honest.

I was scared out of holding these by some posters elsewhere, but I did not want to leave it at that.

I feel I can now make a more measured approach to the up and coming driling by Woodside in Kenya.

Mind you Woodsides geologists worry me a but too after the debacle at Chinguetti!

My Dentist is just as bad as they are at drilling the wrong places.......

Of course with Dana and now Repsol involved in this operation, I am feeling a little more confident to reenter the fray.

Thank you.

sww

There's never any guarantee, of course, but there are a lot of old rigs out there just now having real teething problems because they were stacked for 2-3 years. Once rig equipment lies unused for even a few months, the chances of getting it back to full use without massive headaches is nil. At least this rig seems new and has done some work. I've no doubt Woodside will have looked it over thoroughly with some experienced rig hands so they should know what they are getting. All that chat about shakers and stuff seems silly talk to me. As for SW10's "Laws" I can't see one that does not apply to every rig going back to drilling after a spell away. I'm tempted to say the guy knows enough to be dangerous and nothing more. ;-))

I seem to have missed the Chinguetti thing. I thought all was well down the west coast.

Does anyone have a link to the acreage offshore Kenya. I tried the government site via Woodside one, but there's nothing indicating the blocks and where they are.

One final word on Kenya - what a current down that coast. ;-0

Kenya acreage slide 8 and 9

Points all taken Big Al.

SW10 is a TMF guru who "knows" a lot.

I am not in a position to question his experience, but I understand what you are saying.

Of course I also need to apply that they are only drilling one hole just now, so there's no rush to get in these, using the industry avarage of 25% the likelyhood is they will not hit anything any way, but that wont write off the licenses.

Falklands update......

Before anyone decides it's time to reassess this stock, I understand FOGL have now closed the Data Room for the Farmee's so there may be something coming soon from that direction.

Chinguetti is another (long) story.

Thx for link

Afternoon all!

Firstly, Big Al, thanks for your many replies and the fascinating and useful firsthand info therein!

Next, I tried to give the Chikyu issue some thought overnight and didn't come up with much, apart from two mildly sceptical points:

1.) Given that drilling is fraught with issues anyway, and that the crew of the Chikyu must be at least a little bit profesional or they'd soon be out of business, it seems that underlining the newness of the vessel is a bit of a red herring. If I'm feeling really cycnical I could say it's an extremely subtle deramp. Look how few shares were sold today already (only about 63K, i.e. peanuts, but the SP is up 6.5%) - it doesn't take much to move this one at present.

2.) I don't know SW10, but I've recently read a lot of posts in which the poster is clearly thinking just a little bit too hard (I've probably written a few myself too). Most of the good examples of this phenomenon can be found on the SEO thread - you know the type, where every little detail and turn of phrase in news releases is examined minutely, until one completely loses sight of what the point was in investing (or in my case re SEO, not investing!).

If the SP had plummeted this morning, I'd have thought about getting out, but since the SP is up two days in a row and I'm within 0.25p of breaking even, I think I'll stick. Have to admit I was feeling slightly torn because I have something else in mind that I'm itching to buy, but a funny feeling tells me that patience with my portfolio will reward me over the coming weeks, as various of my investmets are due to report or drill or do something else exciting.

Lots of green all over my portfolio today, actually!

I have resonably optimistic feelings about GBP - I hope they will be successful in turning those big leads into assets and that ought to put legs on the SP.

SWW - good to see you on this thread too!

What's your negative thought about Ching? Okay, the reserves are about to take a hit. Are you suggesting that HNR & Co. should have done a 4D seismic to maybe establish oil seep rates. Or have they genuinely been unfortunate in hitting a resource whose pressure just happened to drop off sharply when they started extracting the oil (I'm no expert, but I guess that anything can and will go wrong)?

I like your #2, soul traders. ;-))

This business is simple really. We try to buy close to the bottom and sell close to the top. lol

Thanks Big Al, and you're dead right - 'bout time there was some serious action too, after three months in the doldrums!

soul - I'll answer on HNR.

Good call, SWW, had the same thought myself about trying to keep things on-thread :o)

Good article about GBP on oilbarrel.com today.

Extract:

Drilling on the Woodside operated Blocks L5 and L7 is due to start in October. The first well will probably test the Pomboo prospect, where broker KBC Peel Hunt says there is gross potential for 200 to 250 million barrels. This will be most likely be followed by a well on the Sokwe prospect (gross 130-150 million barrels).

These wells will indeed be high risk. The waters are virtually unexplored with the Woodside wells being the first wells in Kenyan waters for more than 20 years and the first ever ultra deep wells in East Africa. Woodside has given the project a less than one-in-ten chance of success but given that the project involves some US$100million to US$120 million of drilling costs it seems likely the company actually harbours higher hopes than this.


For Global shareholders, the project offers near term exposure to the drillbit rather than sure-fire production and this is what, for the moment, Global is all about. KBC Peel Hunt has predicted some speculative buying ahead of the wells being sunk.