Oil & Gas News
Falkland Oil And Gas (LON:FOGL) (BUY, 250p) (FOGL LN, 50.5p, ? 0.0%) today announced that it has conditionally placed 112,764,675 new ordinary shares of 0.002 pence at a price of 43p per share to raise £48.5m before expenses. The net proceeds of the Placing will allow FOGL to undertake its preferred drilling strategy on its upcoming two well drilling programme. FOGL is awaiting the arrival of the Leiv Eiriksson rig to the Falkland Islands which is expected to occur within the next ten days. FOGL will have access to the rig for the third and fourth slots in the combined Borders & Southern plc (?B&S?) and FOGL drilling programme and expects to commence drilling its Loligo prospect in the Northern license area in early May 2012. The Environmental Impact Statement for Loligo was approved by the Falkland Islands Government on 24 December 2011 and well planning is now in its final stage. As announced previously, the Company has been funded to drill a shallow well on Loligo and a second well on another Tertiary Channel target such as Nimrod or Vinson. The Company?s preference, however, is to drill a deeper well on Loligo which targets additional reservoirs and to have the financial flexibility to drill a Mid Cretaceous Fan prospect as the second well. The favoured Mid Cretaceous Fan prospect is Scotia which the Company has assessed to have a Pmean prospective resources of 1,062 mmbbls. The feasibility of drilling Scotia has been dependent upon the Company securing additional funding within a sufficient period ahead of its drilling programme commencing. Whilst FOGL has been in active discussions with a number of interested farm-in partners which continue to generate significant interest, the Company does not expect to receive a suitable offer within the necessary timeframe to guarantee funding for FOGL?s preferred drilling strategy. As a result, the Company has decided to undertake this equity fundraising. The net proceeds of the Placing, together with FOGL?s existing cash resources, will provide the financing to drill a deep well on Loligo and a well on Scotia. FOGL?s current preference for the second well is to drill the Mid Cretaceous Scotia prospect as described above. However, depending upon the results of Loligo, FOGL may decide to drill an appraisal well on Loligo, or alternatively another prospect within the Tertiary Channel play such…
