Leiv Eiriksson Rig on Contract

31 July 2012

Falkland Oil and Gas Limited

("FOGL" or "the Company")

Leiv Eiriksson Rig on Contract

FOGL, the oil and gas exploration company focused on its extensive licence areas to the South and East of the Falkland Islands, notes the announcement made today regarding the 'Completion of the 2012 drilling programme' by Borders & Southern Petroleum plc. The Leiv Eiriksson is now under contract to FOGL and its joint venture partner Edison International Spa. The rig has commenced its move to the Loligo well location.

A further update will be provided once the well has spudded.

- Ends -

Enquiries:

Falkland Oil and Gas

+44 (0) 207 563 1260

Tim Bushell, Chief Executive

Oriel (Nominated Advisor and Joint Broker)

+44 (0) 207 710 7600

David Arch / Gareth Price / Ashton Clanfield

Jefferies Hoare Govett (Joint Broker)

+44 (0) 207 029 8000

FTI Consulting

+44 (0) 207 831 3113

Ben Brewerton / Ed Westropp