MercoPress. South Atlantic News Agency

FOGL Granted Extension to Exploration Licences

FOGL announces that it has been granted a two year extension to its approximately 33,000 sq km licence held in joint venture with Hardman Resources, which owns 22.5% of the licence.

As a result of the extension, Phase 1 of the licence now runs until July 2007 and Phase 2 will run from July 2007 until July 2010. During Phase 1, FOGL and Hardman will be required to acquire and interpret an additional 4,000 km of 2D seismic and 2,000 sq km of 3D seismic, and to enter Phase II in July 2007, FOGL and Hardman will be required to commit to the drilling of two (2) wells.

The extension will allow more time to investigate the increased number of leads identified during the recently completed 9,450 km 2D seismic survey acquired across all of FOGL's Licence areas. This survey found more than 130 leads, compared to an initial eight previously identified.

The new 4,000 km 2D seismic survey has already commenced and the joint venture expects to conduct the 3D seismic survey later this year and into 2006. In addition to the new 4,000km of 2D seismic in the FOGL-Hardman area, FOGL will also record a further 4,000km in its 100% 2004 Northern Licence.

To date FOGL has recorded approximately 1,600 km of these new surveys.

The overall aim of this work is to define and prioritise 20 prospects for drilling across all of FOGL's Licence areas and to develop a multi-well drilling programme, targeted to begin in 2007. There have been no changes to the licence terms for the 50,000 sq km licence area that was awarded to FOGL in December 2004.

John Armstrong, Executive Chairman of FOGL, said:

"We would like to thank the Falkland Islands' Government for this extension. We believe negotiations were helped by the fact that we have consistently exceeded the requirements of our licences to date. The additional flexibility afforded by the extensions will help us to introduce new parties to the project and maximise shareholder value."