Interim Results

24th September 2013

Falkland Oil and Gas Limited

("FOGL" or "the Company")

Interim Results for the six months ended 30 June 2013

FOGL, the oil and gas exploration company focused on its extensive licence areas to the South and East of the Falkland Islands, announces its Interim Results for the six months ended 30 June 2013.

Highlights

· Strong Financial Position

- Cash Balance of $161 million at period end

- Substantially carried through the next two exploration wells by Noble Energy

- Sufficient funds to undertake 3D seismic survey in the northern licence area and participate in a multi-well drilling programme commencing in late 2014

· Actively working towards next drilling campaign

- Acquired over 7,000 sq. km of 3D seismic data over the Diomedea fan complex and Cretaceous fault blocks

- Initial interpretation of fast-track 3D seismic data over Diomedia Fan encouraging

- Rig enquiry issued and available rigs identified from a broad range of drilling contractors

Richard Liddell, Chairman of FOGL, said:

"The first half of 2013 has seen excellent progress with the follow on work from the 2012 drilling campaign and preparations for the next.

One of the most exciting phases for FOGL and its shareholders is rapidly approaching, with the interpretation of the first 3D seismic acquired over our licences, followed by the selection of well locations from this new data.

Our financial position remains very strong and we are in an excellent position to take advantage of the opportunities to exploit our exploration licences and create value for our shareholders."

Enquiries:

Chairman's Report

FOGL is pursuing an exploration programme which is geared not only to creating transformational value, but also achieving maximum impact from shareholder funds by prudently sharing both costs and risk with other oil companies.

In the first six months of 2013 FOGL and its co-venture partners conducted extensive 3D seismic surveys within its southern licences over the Diomedea fan complex and fault block area, adjacent to the Darwin discovery. Both surveys were managed by Noble Energy on behalf of the Joint Venture and were completed on time and within budget. These surveys will help take our sub-surface understanding to a new level. In particular, they will facilitate detailed mapping of prospects and provide well locations for the 2014/15 drilling campaign.

A key focus for the joint venture is to realise the value of our assets through oil exploration. Analysis of the 2012 drilling results has identified areas within the basin that are the most prospective for oil. The new 3D seismic will substantially enhance our ability to differentiate oil from gas prospects and will also, be invaluable for locating the best quality reservoir.

FOGL recently received the fast-track 3D seismic over the Diomedia fan complex and analysis of this data has commenced. Data quality and seismic imaging are excellent and we are encouraged by our initial interpretation. Noble Energy, who will take over operatorship of the southern licences in 2014, has already identified two material prospects, Humpback and Finback, using the new 3D data.

Work is underway to secure a suitable drilling rig for 2014. A rig enquiry was issued in June and a favourable response was received from a number of rig owners. Noble Energy is now following up this inquiry and is holding discussions with a number of potential rig contractors. It is likely that the rig will be shared with one or more of the other Falkland operators, thereby mitigating some of the mobilisation costs of both rig and associated drilling services. Long lead drilling equipment will be ordered in the near future and Noble are in advanced discussions with the Falkland Islands Government in regards to the provision and siting of a temporary port that will be used to service the offshore drilling operations.

Financials

The loss before tax for the six months was $0.9 million (2012: $0.2 million), with interest earned in the period of $1.2 million (2012: $1.6 million). Foreign exchange losses of $0.4 million (2012: gains of $0.8 million) were incurred, principally on Sterling balances held to cover UK head office costs.

At 30 June 2013 the Company had cash and bank balances of approximately $161 million and is fully funded for the current planned seismic work programme and up to three exploration wells.

Forward plans

The fast-track data over the fault block area is expected shortly. The Joint Venture plans to acquire a third 3D seismic survey over the Northern area licences commencing during the fourth quarter of 2013.

The next phase of drilling is now being actively planned, with an expected commencement of operations in the fourth quarter of 2014. Noble Energy is currently looking to secure a suitable deepwater rig and is planning to drill a minimum of two exploration wells. A number of additional well options will also be sought in the rig contract and further wells will be drilled given sufficient encouragement.

Falkland Oil and Gas Limited

Condensed Statement of Comprehensive Income

For the six months ended 30 June 2013

All amounts included above relate to continuing operations.

Falkland Oil and Gas Limited

Condensed Statement of Financial Position (unaudited)

At 30 June 2013

Falkland Oil and Gas Limited

Condensed Statement of Cash Flows (unaudited)

For the six months ended 30 June 2013

Falkland Oil and Gas Limited

Condensed Statement of Changes in Equity (unaudited)

For the six months ended 30 June 2013

Falkland Oil and Gas Limited

Notes forming part of the Interim Results

For the six months ended 30 June 2013

1. Accounting policies

The condensed unaudited interim financial information set out in this report is based on the financial statements of Falkland Oil and Gas Limited ("FOGL"). The condensed financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2012, which were prepared in accordance with International Financial Reporting Standards. The financial statements of the Group for the 6 months ended 30 June 2013 were approved and authorised for issue by the Board on 23 September 2013. These financial statements have been prepared in accordance with the accounting policies that are expected to be applied in the Report and Accounts of FOGL for the year ending 31 December 2013 and are consistent with International Financial Reporting Standards adopted for use in the European Union.

Basis of preparation

The financial information for the six months ended 30 June 2013 and 30 June 2012 is unreviewed and unaudited and does not constitute the Company's statutory financial statements for those periods. The comparative financial information for the full year ended 31 December 2012 has been derived from the statutory financial statements for that period. The statutory accounts for the year ended the 31 December 2012 have been filed with the Registrar of Companies. The auditors' report on those accounts was unqualified.

The financial statements are presented in United States Dollars and all values are rounded to the nearest thousand dollars ($'000) except when otherwise indicated.

The Company has certain contractual agreements with other participants to engage in joint activities that do not create an entity carrying on a trade or business of its own. The Company includes its share of assets, liabilities and cash flows in joint arrangements, measured in accordance with the terms of each arrangement.

Following the completion of the 2012 work programme and the finalisation of joint venture billings the statement of Financial Position as at 31 December 2012 has been restated to reclassify $22.6m from amounts recoverable from joint venture partners to exploration and appraisal expenditure. The restatement does not impact on total assets, net assets or retained earnings and equally does not affect the Statement of Comprehensive Income or the Statement of Cash Flows.

Falkland Oil and Gas Limited

Notes forming part of the Interim Results (continued)

For the six months ended 30 June 2013

2. (Loss) / earnings per share

The loss per share is calculated on the reported loss for the period of $941,000 (2012: interim loss of $160,000, year end 31 December 2012: profit of $1,051,000). The weighted number of shares and the weighted average number of diluted shares is set out below. There is no difference between diluted loss per share and the basic loss per share for the periods ended 30 June 2013 and 30 June 2012 as the Company reported a loss for these periods. There is no significant difference between the basic and diluted earnings per share for the year ended 31 December 2012.

3. Intangible assets

As described in note 1, following the completion of the 2012 work programme and the finalisation of joint venture billings $22.6 million of costs at 31 December 2012 has been reclassified from trade receivables to exploration and appraisal expenditure.

Falkland Oil and Gas Limited

Notes forming part of the Interim Results (continued)

For the six months ended 30 June 2013

4. Cash and cash equivalents

5. Interim Statement

Copies of this Interim report for the six months ended 30 June 2013 will be available from FOGL's UK office 32-34 Wigmore Street, London, W1U 2RR, and on the company's website www.fogl.com.