FOGL, the oil and gas exploration company focused on its extensive license areas to the South and East of the Falkland Islands, has announced its Interim Results for the six months ended June 30, 2008.
Richard Liddell, Chairman of FOGL, said, "All the work streams required ahead of drilling are now in progress. We are working closely with our partner, BHP Billiton, to identify the prospects that will be drilled in the forthcoming drilling program, which is planned to commence in second half 2009."
During the first six months of this year FOGL and its partner BHP Billiton have been focused on the preparatory work for the forthcoming drilling program. An environmental impact assessment has been initiated and a site survey program is planned to commence in November 2008. These are important steps in providing greater detail on the key areas of the licenses and will feed into the final drilling program.
One of the most important decisions in the near future will be the selection, and order, of the prospects to be drilled. Whilst no final decisions have been made regarding this selection, it is likely that Loligo will be one of the prospects tested in the initial drilling program. Loligo is one of a number of prospects within the Tertiary channel play system, it has been well defined by seismic surveys and it has exhibited a positive CSEM anomaly. It is also of considerable size: FOGL estimates most likely un-risked reserves of 3.5 billion barrels of oil, and clearly, a successful result with Loligo would have a significant impact on FOGL.
Efforts to secure a suitable rig are in progress and it is currently expected that a drilling program will commence in the second half of 2009. The rewards for success could be substantial, given the large resource volumes of the prospects being targeted.
FOGL started the period with £12.5 million in cash, of which £0.67 million was invested in the exploration programme and £0.75 million was used to cover operating costs. The loss before tax for the six month period was £1.1m. At the end of the period the cash balance was £11.3 million of which £8.7 million are held as US dollars.
BHP Billiton is currently reviewing a number of potential rig options and an announcement will be made as soon as a rig is secured.
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