Friday, June 10, 2011

Falkland Oil and Gas Limited Plans to Acquire Extensive License Areas to the South and East of the Falkland Islands

Falkland Oil and Gas Limited (FOGL) is an oil and gas exploration company operating in the South and East Falkland Basins, potentially a new petroleum province in the South Atlantic. Recently, the company secured operatorship and the remaining 51% interest in the Northern license area from BHP Billiton. Currently, FOGL is planning a two well program commencing from Q1 2012, first well on Loligo, identity of 2nd well dependent on results.

FOGL recently confirmed drilling operations on the south of the Falkland Islands will begin in the first quarter of 2012 and revealed it is in early talks with firms interested in taking part in its exploration program. The company however anticipated it did not expect to conclude any farm-out agreement until later this year.

Separately, FOGL said it was planning to acquire some additional focused 2D seismic for its deeper Scotia and Hero prospects so that it can fine-tune the location of an exploration well on either of these two prospects.

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In May 2011, the company revealed it had secured a rig contract for two slots and hopes to begin drilling on its prospects in the first quarter of 2012. The announcement came after it already confirmed it is to test the Loligo prospect - with estimated reserves of 4.7 billion barrels.
The firm added then that it had sufficient funds for a second appraisal well on either Loligo, or on one of the other high ranked prospects such as Nimrod, Vinson or Inflexible and was considering targeting Scotia or Hero but this would involve additional cost due to their greater depth.

“Since becoming operator and 100 percent owner of our licenses on 31 March, we have secured a suitable rig, put in place funding for a 2 well program and have established an experienced drilling management team.”, Tim Bushell, Chief Executive, FOGL.

”We have also accelerated all the other required work streams in preparation for our drilling program which is expected to commence in the first quarter of 2012.”

FOGL is required to make a mandatory relinquishment of 20% of the Northern License area at the end of 2011 as required under the existing license terms. The second phase of the Northern license area does not expire until 15 December 2015 and carries the obligation to drill a single exploration well.

FOGL has already entered Phase 2 of the Southern License area and no further relinquishment is required. FOGL is focused on extensive license areas to the South and East of the Falkland Islands.

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