Falkland identifies 130 leads

Offshore staff

Falkland Oil and Gas Ltd. (FOGL) has identified 130 leads since the completion and interpretation of its 9,450 km 2D seismic data acquisition program over most of its licence area. This increase is in excess of the eight leads identified at the time of its AIM IPO in October 2004. The company plans to increase the scope of its exploration program.

This program indicated a larger and more diverse project than originally anticipated and identified numerous drill targets. The preliminary results of the survey identify direct hydrocarbon indicators (DHI) pointing to working petroleum systems. The DHI's include gas chimneys, amplitudes, and possibly gas hydrates.

The leads are large and diverse with some covering areas of 300 – 500 sq km. There is also a wide range of play types.

The company has further work planned to target 50 leads and define 20 drillable prospects by mid-2006. FOGL will drill the first well in 2007.

"In my opinion, this is the most exciting project I've seen for many years. The results of the 2D seismic are encouraging. The number of leads identified has far exceeded our most optimistic estimates and we believe it has greatly enhanced FOGL's prospects. It is clear that the scope of work needed to maximize the potential of our acreages has increased significantly," John Armstrong, executive chairman of FOGL, says.

FOGL held a 77.5% interest in seven offshore production licenses covering approximately 33,700 sq km to the south and east of the Falkland Islands. FOGL holds these licenses in a joint venture with Hardman Resources. In December 2004, FOGL acquired a 100% license over an additional 50,000 sq kms adjacent to its existing license areas. The 83,700 sq km area held by FOGL is equivalent to 380 North Sea blocks: as large as the Southern Gas basin and the Central Graben combined.

5/06/05