Operations Update

25 September 2015

Falkland Oil and Gas Limited  

("FOGL" or the "Company")

Operations Update

Falkland Oil and Gas Limited ("FOGL"), the exploration company focused on its extensive licence areas to the North, South and East of the Falkland Islands, is providing an operational update on the Humpback exploration well and a revised drilling programme.

Humpback well

The resolution of the equipment issues took longer than expected. Drilling has recommenced and FOGL now anticipates that the results of the well will be available in early October 2015.

Further well on Isobel/Elaine

An agreement has now been reached with Premier Oil and Rockhopper Exploration to drill a further well on the Isobel/Elaine complex. This well will replace the Jayne East well in the current drilling campaign.

Under an amendment to the farm-out agreement FOGL will receive US$10 million from Premier Oil and Rockhopper Exploration in compensation for not drilling the Jayne East well. FOGL will be fully carried through its 40% equity share of the well costs, as per the original farm-out agreement. There is an ongoing insurance claim with respect to the 14/20-1 Isobel Deep well and FOGL will be party to this claim.

The re-drill well will target the Isobel Deep reservoir which was oil bearing in 14/20-1, but could not be logged or sampled for mechanical reasons. This new well will be drilled a suitable distance (approximately 4km) from the original well bore and is also expected to encounter additional reservoir targets in the Elaine South and Isobel Shallow fans. It is currently anticipated that this well will be drilled after the completion of Humpback.

Swapping Jayne East for a further well on Isobel/Elaine is subject to the final approval of the Falkland Islands Government.

For further information: