One of the several hydrocarbons companies operating in Falkland Islands waters expects its next drilling phase to begin in the fourth quarter of 2014 with a minimum of two exploration wells following extensive 3D surveying of southern licences in the Diomedea fan complex adjacent to the Darwin discovery.
In the interim financial results to June 30 statement AIM listed Falkland Oil and Gas Ltd., FOGL reported a pre-tax loss of 900.000 dollars for the six months ending June 30, but assured investors its cash balance of 161 million dollars was sufficient to undertake a further 3D seismic survey and participate in the multi-well drilling program next year.
FOGL said it completed a 3D seismic survey of the Diomedea area in April, covering a total of 5.235 square kilometers and now has 7.000 square kilometers of data over it and the Cretaceous fault blocks.
In addition, Falkland said the initial interpretation of fast-track 3D seismic data over the Diomedia fan ‘was encouraging’.
However FOGL losses were up significantly from the same period in 2012, when it reported pre-tax losses of 200.000 dollars and the company also earned less interest year-on-year in the six months to 30 June, at 1.2 million compared with 1.6 million a year earlier.
Administrative expenses were down 35% at the company, to 1.4m from 2.1m. FOGL posted a foreign-exchange loss of 354.000 dollars compared to a gain of 805.000 the previous year, as sterling balances held to cover UK head office costs decreased in value.
The joint venture with Texas based Nobel Energy plans to acquire a third 3D seismic survey over the Northern Falkland area licences, which it aims to start in the fourth quarter of this year, while the next phase of drilling is planned for the fourth quarter of 2014.
Noble Energy, which conducts Falkland's surveys, is currently looking to secure a suitable deepwater rig and planning to drill a minimum of two exploration wells, the update said.
Richard Liddell, chairman of FOGL, also steered away from the company's losses although he described the first half of 2013 as ‘excellent progress with the follow on work from the 2012 drilling campaign and preparations for the next”.
One of the most exciting phases for FOGL and its shareholders is rapidly approaching, with the interpretation of the first 3D seismic acquired over our licences, followed by the selection of well locations from this new data.
Our financial position remains very strong and we are in an excellent position to take advantage of the opportunities to exploit our exploration licences.”
Falkland shares were up 2.2% to 28.87 pence Tuesday.