Operations Update

7 November 2012

Falkland Oil and Gas Limited

("FOGL" or "the Company")

Operations Update

FOGL, the oil and gas exploration company focused on its extensive licence areas to the South and East of the Falkland Islands, announces, further to the statement of 25 October 2012, that the necessary repairs were carried out on the blow-out preventer within the expected timeframe, and drilling has re-commenced.

The Company estimates it will take a further 4-6 weeks to complete drilling operations. The Company will make a further announcement at that time.

Tim Bushell, Chief Executive of FOGL said:

"Whilst this work has resulted in a two week delay to our drilling operations, safety is our number one priority and it was essential to resolve this issue before recommencing drilling operations."

- 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

 Alex Grant / Chris Zeal / Graham Hertrich

 FTI Consulting

 +44 (0) 207 831 3113

 Ben Brewerton / Ed Westropp