MercoPress. South Atlantic News Agency

Falklands’ exploratory oil drilling season takes off

FOGL CEO Tim Bushel delighted with share placing

Falkland Oil & Gas Ltd. and Explorers Borders & Southern Petroleum are set to boost their coffers via share sales, with the cash earmarked for drilling work off the Falkland Islands, reports Upstreamonline. Oil rig “Ocean Guardian” left Scotland.

FOGL, which focuses on south and east of the Falkland Islands, announced Thursday it had completed the placing of 43.478.261 new ordinary shares at 115 pence (a 15% discount to the stock’s prior close) to raise £ 50 million.

FOGL hopes the offering will pay for its planned drilling program in full, adding the work could start as early as the first half of next year.

Chief executive Tim Bushell said: “We are delighted to have raised the capital necessary to fully fund our planned exploration programme and look forward to completing the contractual rig arrangements to commence a minimum two well exploration program in 2010.”

Falkland Islands Holdings' shareholding in FOGL remains unchanged at 15,000,000 ordinary shares representing a 10.26% interest.

The second explorer Borders & Southern, which focuses on exploration in the South Falklands basin, said it plans to raise £113.1 million (187.3 million USD) by placing 234.2 million shares at 50 pence apiece.

The offer represents a discount of 9% to the stock's Wednesday close of 55 pence.

Meanwhile “Ocean Guardian” the oil and gas exploration rig contracted by Desire Petroleum departed from the Cromarty Firth in Scotland at 2.00pm on Thursday 26 November for a 62-day journey to the South Atlantic to explore reserves in the North Falkland Basin.

Diamond Offshore Drilling said the length of the trip from Invergordon on the Cromarty Firth could change if there was bad weather but should reach the Falklands by February. The tug “Maersk Traveller” will be involved in the moving the 24-year-old Glasgow-built semi-submersible rig.

“Ocean Guardian” is part of Diamond Off-shore's fleet of 47 rigs, and was previously used in the North Sea. The company expects the semi-submersible to remain off the Falklands for a year with option for a following extra year, conditioned to finding any oil or gas in the first eight wells.

According to Desire the North Falkland holds potential oil reserves exceeding 3.5 billion barrels and more than nine trillion cubic feet of gas.