Falkland O&G Shops for Rig, Plans to Drill by 2009

Falkland Oil and Gas Limited (FOGL), the oil and gas exploration company focused on its extensive license areas to the South and East of the Falkland Islands, held its Annual General Meeting.

2007 was a year of significant progress. We undertook additional exploration activity to further de-risk the project; this work confirmed the high potential of the assets. In aggregate, our ten top ranked prospects have the potential to contain hydrocarbon resources in excess of 10 billion barrels oil equivalent.

The farm-in deal secured in October 2007 with BHP Billiton includes a commitment to drill a minimum of two exploration wells. BHP Billiton has extensive deepwater drilling expertise and the deal added credibility to the exploration assets and was a crucial step in moving towards a drilling campaign next year.

Preparation work for the drilling program is in progress. BHP Billiton is currently reviewing a number of options to secure a suitable rig and focusing on the selection of the best prospects for drilling. An environmental impact assessment has been initiated, together with other planning activities that will be required before drilling can commence. Planning for site surveys is also underway and these are expected to be carried out in the second half of 2008.

FOGL is poised to enter the exploration drilling phase with a material license equity interest in what may well be a significant new petroleum region in the South Atlantic. We hope to commence exploration drilling in 2009, the next year promises to be a very exciting one for FOGL. The rewards for success could be substantial, given the large resource volumes of the prospects being targeted.