FOGL Places Shares to Raise Additional Working Capital

FOGL, the oil and gas exploration company with license areas to the south and east of the Falkland Islands, has conditionally raised £7.6 million before expenses (£7.2 million net) through an issue of 10,448,099 new ordinary shares of 0.002 pence in the capital of the Company ("Ordinary Shares") with new and existing institutional investors and certain directors of the Company at a price of 73 pence per share (the "Placing Price").

Use of proceeds

The net proceeds of the fundraising will be used to provide additional working capital to fund long-lead drilling equipment and general and administrative costs through 2010 and into 2011. The directors of FOGL (the "Directors") expect to raise the additional capital required to fund the Company's share of the drilling programme through a further farmout and/or equity issue in due course.

The Placing

Oriel Securities Limited ("Oriel") has agreed to use its reasonable endeavours to procure subscribers for 10,371,923 new Ordinary Shares (the "Placing Shares")(the "Placing"). The Placing has not been underwritten.

Application will be made for the Placing Shares to be admitted to trading on the AIM market of London Stock Exchange plc ("Admission"). The Placing is conditional, inter alia, upon Admission. Admission is expected to become effective, and dealings in the Placing Shares to commence, at 8.00 a.m. on May 26, 2009.

The Appendix to this announcement (which forms part of this announcement) sets out the terms and conditions of the Placing.

RAB Group participation in the Placing

Pursuant to the Placing, 1,000,000 of the Placing Shares have been placed with RAB Special Situations (Master) Fund Limited ("RAB SSMF"). In addition, 1,000,000 of the Placing Shares have been placed with RAB Capital PLC ("RAB"), which is discretionary manager to RAB SSMF. Following admission of the Placing Shares, RAB SSMF will hold 34,539,278 shares in the Company representing 33.61% of the enlarged issued share capital of the Company and RAB will hold 1,000,000 shares in the Company representing 0.97% of the enlarged issued share capital of the Company.

As a company incorporated under Falkland Islands law and with its registered office in the Falkland Islands, FOGL is not subject to the Takeover Code. Therefore the acquisition of an interest in excess of 30% of the voting rights of FOGL does not give rise to an obligation to make a mandatory offer for the balance of the share capital under the Takeover Code. However, under FOGL's Articles of Association, in circumstances where, had the Takeover Code applied to FOGL, a party would be obliged to make a mandatory offer and has not done so, the board of directors of FOGL (the "FOGL Board") is entitled, but not obliged, to suspend the voting rights of the shares held by such a party.

Having carefully considered the acquisitions by RAB SSMF and RAB, who are considered by the Board to be acting in concert, the FOGL Board has advised RAB and RAB SSMF that it will not exercise its entitlement to suspend voting rights attaching to the shares owned by either of them.

Under the terms of the warrants issued to RAB SSMF (the "Warrants"), as announced on November 29, 2006, upon exercise of the Warrants RAB SSMF is entitled to subscribe for Ordinary Shares at an issue price based on the lower of £1 or a 30% premium to the price at which ordinary shares are subsequently placed. As a result of the Placing Price of 73 pence the Warrants will now be exercisable at 94.9 pence.

Director participation in the fundraising

Richard Liddell, Chairman, Tim Bushell, Chief Executive, and Colin More, Exploration Director, have participated in the fundraising taking up 76,176 new Ordinary Shares between them.

The Placing Price represents a discount of 11.9% to the average middle market closing quotation of the ordinary shares of the Company for the 10 business days up to and including May 19, 2009 and a discount of 18.9 per cent. to the closing middle market quotation of the ordinary shares of the Company on May 19, 2009, the latest date prior to the announcement.

Following completion of the fundraising, the Company will have 102,773,805 Ordinary Shares in issue. The Placing Shares together with the new Ordinary Shares to be issued to certain of the Directors, which will rank pari passu in all respects with the Company's existing issued Ordinary Shares, represent approximately 11.3% of the existing issued share capital of the Company on Admission.

Tim Bushell, Chief Executive of FOGL, said, "I am delighted that institutional investors have shown their support for FOGL's prospects through this placing."


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