Falkland Oil and Gas to Conduct New 2D Seismic Survey

Falkland Oil and Gas Limited has signed a contract with Wavefield InSeis AS to undertake a 10,000 km 2D seismic survey over the company's licenses in the South and East Falkland Basins.

This is the second part of our revised forward exploration program. Our strategy is to acquire Controlled Source Electro-magnetic ("CSEM") data over many of the larger prospects and leads that we have identified, and, based on the results from the CSEM survey, acquire infill 2D seismic over the most prospective targets. The data from the two programs will help us to further de-risk the prospects and determine the best targets for drilling exploration wells in 2008. Our revised program is a very significant achievement for the Company. With the large number of prospects that we have, these two methods will provide the most effective exploration solution for FOGL.

FOGL will also have the option to acquire additional 2D seismic over the 10,000 km, dependent on both the results of the CSEM survey and weather conditions. We expect to commence both the 2D seismic and the CSEM surveys before the end of 2006 and be in a position to announce the results next year.

Tim Bushell, Chief Executive Officer commented:

"The proposed 2D seismic program, in conjunction with the recently announced CSEM survey, represents the launch of our revised forward program. This achievement is highly significant for the Company and we believe it will provide FOGL with the most effective solution to further explore its license areas. The data collected from this program, will assist us to further de-risk and identify the best prospects for drilling in 2008.