Borders & Sth. Share News (BOR)

(Adds background and detail.) By Jason Douglas Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Oil and gas explorer Falkland Oil & Gas Ltd. (FOGL.LN) Monday said it didn't find oil at an exploration well off the coast of the Falkland Islands, marking the second disappointment in a mixed campaign by a small group of U.K. companies looking for oil in the waters near the disputed south Atlantic territory. Falkland Oil & Gas said it plugged and abandoned the Toroa exploration well after failing to find any hydrocarbons, sending its shares sharply lower. At 0759 GMT, shares in the company were 88.75 pence, or 44%, lower at 113 pence, underperforming a 0.1% lower Alternative Investment Market. Of the three firms that have taken their turn drilling in the campaign so far, only Rockhopper Exploration PLC (RKH.LN) has made a promising discovery. Its Sea Lion discovery is estimated to contain 242 million barrels of recoverable oil although Sea Lion has yet to be declared commercial. Desire Petroleum PLC (DES.LN), which drilled first, reported disappointing results from its Liz prospect in March. It found some gas but only poor quality oil. A fourth company, Borders & Southern Petroleum PLC (BOR.LN), is awaiting its turn to drill. The explorers' plans sparked a diplomatic row between the U.K. and Argentina, which claims the islands are under "illegitimate British occupation" 28 years after a brief but bloody war over their sovereignty. The current campaign isn't the first time that oil exploration has taken place in Falkland waters. In 1998, a consortium of companies, including Royal Dutch Shell PLC (RDSA.LN) started drilling in the North Falklands basin, 6.25 miles from where Rockhopper will drill its Sea Lion prospect. -By Jason Douglas, Dow Jones Newswires; 44-20-7842-9272; jason.douglas@dowjones.com (END) Dow Jones Newswires July 12, 2010 04:03 ET (08:03 GMT)