MercoPress. South Atlantic News Agency

Falkland Oil & Gas confirms drilling rig for two slots in the first half of 2012

Chairman Richard Liddell, “FOGL in a strong financial position to drill”

Falkland Oil and Gas (FOGL), the exploration company focused on its extensive licence areas to the South and East of the Falkland Islands, reiterated it has signed a contract for the Leiv Eiriksson drilling rig for two firm slots in the first half of 2012.

In its interim results for the six months ended 30 June 2011 FOGL says that the operations and remaining 51% equity in Northern Licence Area has been assigned back to FOGL by BHP Billiton together with a significant cash settlement.

The company has completed the site survey and 2D seismic program.

An equity placing raised 51.8 million dollars before expenses and there was a cash balance of 110.6 million dollars at the end of June (2010: 80.4m). Current available funds including the BHPB settlement, is 150.6 million dollars.

Richard Liddell, Chairman of FOGL, said: ”We made good progress during the first half of 2011, during which we negotiated the exit of BHPB from our licences and regained complete control and operator-ship of our licence areas while also securing significant cash payment from BHPB”.

He described this as “an excellent outcome, which has enabled us to drive forward with the most important phase of our exploration program. In addition, we successfully raised 51.8 million dollars through a share placing, which, combined with existing cash resources and BHPB payment, leaves us in a strong financial position to drill two wells in 2012”.

Finally Liddell pointed out that FOGL signed “a rig contract and expect drilling to commence with the Loligo well in the first quarter of 2012. In addition, a number of other prospects have been selected and prioritized as possible targets for the second well in the program”.