MercoPress. South Atlantic News Agency

FOGL ready for seismic surveying in south and east Falklands.

On 30 September 2004, Falkland Oil and Gas Limited (FOGL or the Company) announced the launch of an offer for subscription (Offer) to raise up to £ 2,000,000 through the issue of up to 5,000,000 ordinary shares of 0.002p each (Ordinary Shares) at 40p per share.

FOGL announced this Wednesday that, as at 3.00 p.m. on 12 October 2004, the closing date, it had received 1,294 applications for a total of 17,451,175 Ordinary Shares representing £ 6,980,470. As a result the Offer is oversubscribed and applications will not at all be settled in full but will be subject to scaling back in accordance with the allocations policy set out below.

Applications policy:

In accordance with the terms of Offer contained in the Company's prospectus date 30 September 2004, the basis of allocation of new shares under the Offer has been determined by the Company in its absolute discretion.

The minimum subscription under the Offer was of 2,500 shares (£ 1,000) and all valid applications will receive at least this amount.

Applicants will also receive 12,415% of the amount they have applied for in excess of 2,500 shares.

The Company anticipates that share certificates will be sent out, and excess application monies returned, by the latest 28 October 2004.

"We are delighted with the level of support for our fundraising that has been given by both the retail public and institutions and now look forward to reporting the results of the 2D seismic survey expected in early 2005", said John Armstrong, FOGL Executive Chairman.

Last June Falkland Islands Holdings PLC announced that in conjunction with the joint venture partners, Global Petroleum Limited and Hardman Resources Limited it had reached an agreement with RAB Special Situations Fund, a fund managed by AIM listed hedge fund manager RAB Capital plc to fund the next 12/18 months work on their petroleum exploration licence offshore the Falklands.

The work program includes the design, implementation, processing and interpretation of a 2D seismic survey this coming austral summer.

This apparently followed the mapping in 2003 of 4,340 kilometres of purchased seismic data which had identified a number of leads in water depths of 400/1,850 metres and comprise targets with the potential to contain 200 million to 2,5 billion barrels of oil.

Under the agreement the joint venture formed a new company, Falkland Oil and Gas Limited, FOGL which owns 77,5% of the licences while the remaining 25% are held by Hardman. The shareholdings in FOGL is RAB 45,4%; FIC 28,9% and Global 25,7%.

For the coming 2D offshore surveying FOGL was to contribute 3,6 million US dollars (as a result of share subscriptions to FOGL of 2,2 million US dollars by RAB; 1,1 million US dollars by FIH and 0,5 million US dollars by Global) and Hardman 0,9 million US dollars totalling 4,5 million US dollars.

Dampier Oil Limited a wholly owned subsidiary of Global Petroleum will operate the project during the seismic period.

The last FOGL-Hardman joint venture June plan is surveying 3,500 kilometres, which can be expanded subject to tenders received.

The licences cover an area of 33,700 square kilometres and are located to the south and east of the Falklands. The company indicates that no wells have been drilled in these areas but in the adjacent Malvinas basin to the west oil and gas has flowed from "Calamar 1" and "Salmon 2" wells in the Cretaceous Springhill formation.

The south and east Falkland areas are geologically distinct from the North Falkland Basin which was the focus of oil exploration activity during 1996/98.