MercoPress. South Atlantic News Agency

Falkland Oil and Gas Ltd. Press Release

FOGL, the oil and gas exploration company operating in the undrilled South and
East Falkland Basins, announces its unaudited interim results for the 6 months
ended 30 September 2005.

Highlights

? 2D seismic survey is proceeding well with 20,000 km completed of the 24,500km planned ? Technical information continues to provide encouragement that the Company's licences could contain a new petroleum province ? Technical and commercial information presentations to potential participants commenced in September; attended so far by a number of oil companies including majors ? Stellar Energy Advisors appointed to manage the farm out project ? Cash balance £16.5m at 30 November 2005

Management Changes

? Richard Liddell appointed Non-Executive Chairman to succeed John Armstrong who steps down as Executive Chairman but will remain on the Board. ? Process to recruit a UK-based CEO is well advanced, further announcement imminent

Outlook

? Complete 2D Seismic Survey - recording, processing and interpretation in first half 2006 ? Introduce new participants by farm out in first half 2006 ? First exploration well targeted for 2007

John Armstrong, Executive Chairman of FOGL, said:

'While we continue to progress our second 2D seismic survey, which will take the total seismic acquired to about 24,500 km, we are also seeking to attract third party participants (i.e. farminees) to the project. The scale of the opportunity is such that we believe that the route to maximise shareholder value is through the involvement of other companies. We have begun to speak with a number of companies, including majors, and we are targeting the first farm in as soon as is possible in the New Year.

We have steadily strengthened the management team at FOGL in line with the growing potential of our licences and we feel that the Company now needs a full time chief executive and a UK-based chairman. As such, I will be standing down as Chairman and will be succeeded by Richard Liddell, a non-executive director since March 2005, as Non-Executive Chairman. The search for a UK based chief executive is well advanced and we expect to make an announcement on this in the very near future.

All the indications are that oil and gas is present in our licences, and that the leads are big enough to hold very large volumes. The key question now is whether oil and gas is present in sufficient quantities to be commercial. Whilst the technical evidence is encouraging, commerciality can only be determined by drilling and 2007 remains our target for the first well.'

More information: www.fogl.co.uk