FOGL to Conduct Survey in Falkland Basins

Falkland Oil and Gas Limited

Falkland Oil and Gas Limited (FOGL) has signed a letter of intent with Offshore Hydrocarbon Mapping plc (OHM) to undertake a Controlled Source Electro-Magnetic survey (CSEM) over the company’s licenses in the South and East Falkland basins.

The use of CSEM technology in this environment is particularly appropriate and exciting. CSEM is a method that investigates the electromagnetic properties of rocks and has a recognizable response when oil and gas is present. CSEM is an extremely cost-effective method of high grading an extensive inventory of exploration prospects and leads. CSEM imaging works best under certain conditions, including deepwater (>500 meters), simple sand and shale geological sequences, and large traps (prospects)--all of which are prevalent within FOGL’s South and East Falkland basins. This program has the potential to indicate which of FOGL’s numerous prospects may contain hydrocarbons. The company’s strategy will be to obtain CSEM data over many of the larger prospects. Based on the results, infill 2D seismic will then be acquired in order to determine the best sites for exploration wells.

This is the first part of FOGL’s revised forward exploration program recently discussed with the Falkland Island Government. FOGL had already begun preparatory work that will enable rapid implementation of a CSEM survey, further demonstrating FOGL’s commitment to this exploration acreage.

FOGL expects to commence both the CSEM and 2D seismic surveys before the end of 2006 and be in a position to announce the results early next year.

“We are very excited by this new technology and its application in our licenses,” said Tim Bushell, FOGL’s CEO. “The use of CSEM imaging is an appropriate exploration tool given the large number of prospects and leads that we have identified. We believe that CSEM can help to significantly reduce risk, improve the chance of success and allow us to focus on the best prospects for drilling in 2008.”