DES.L Regulatory News (DES)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

5 December 2013

Recommended Combination

 of

Falkland Oil and Gas Limited ("FOGL")

with

Desire Petroleum plc ("Desire")

Scheme effective and capital reduction confirmed

On 3 October 2013, the boards of FOGL and Desire Petroleum, announced that they had reached an agreement on the terms of a recommended combination of FOGL with Desire (the "Combination"), pursuant to which FOGL will acquire the entire issued and to be issued share capital of Desire in exchange for FOGL Consideration Shares to be effected by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006 (the "Scheme").

FOGL is today pleased to announce that the Scheme has now become effective in accordance with its terms and that, at a hearing held earlier today, the High Court of Justice in England and Wales sanctioned the Scheme and confirmed the reduction of capital in connection with the Scheme. The admission to trading on AIM of the Desire Shares will be cancelled with effect from 07.00 a.m. on 6 December 2013.

Under the terms of the Combination, Scheme Shareholders are entitled to receive 0.6233 FOGL Consideration Shares for each Desire Share and consequently pursuant to the Scheme, 212,150,020 New FOGL Shares will be issued to Desire Shareholders.

Application has therefore been made to the London Stock Exchange for the FOGL Consideration Shares to be admitted to trading on AIM, totalling 213,344,494 new FOGL Shares. It anticipated that the dealings in the FOGL Consideration Shares will commence at 8.00 a.m. on 6 December 2013. CREST member accounts in respect of the FOGL Depositary Interests in uncertificated form will be credited as soon as possible after 8.00 a.m. on 6 December 2013. Share certificates in respect of the FOGL Consideration Shares held in certificated form will be despatched to Desire Shareholders by no later than 19 December 2013.

Following Admission of the Consideration Shares, the Company's total issued share capital will comprise 533,344,494 Ordinary Shares.

FOGL can also confirm that following the scheme becoming effective Stephen Phipps, Robert Lyons and Ian Duncan have joined the Board of FOGL as Non-Executive Directors.

Terms and expressions used in this announcement shall, unless the context otherwise requires, have the same meanings as given to them in the circular sent to shareholders of FOGL on 23 October 2013.

Tim Bushell, Chief Executive of FOGL said:

"We are delighted to have now concluded this combination with Desire Petroleum. The combined portfolio offers a diversified risk profile with near term, high impact exploration opportunities in the South Falkland basin, coupled with new drilling in highly prospective licences within and adjacent to the Sea Lion complex in the North Falklands Basin. The enlarged FOGL now holds the largest acreage position in the Falkland Islands which offers wider opportunities to create value for shareholders."

-ENDS-

For further information, please contact:

The Combination will be made on the terms and subject to the conditions and further terms set out in the Scheme Document.

RBC Europe Limited, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority is acting exclusively for FOGL and no one else in connection with the Combination and this announcement and will not be responsible to anyone other than FOGL for providing the protections afforded to clients of RBC Europe Limited, or for providing advice in connection with the Combination or any matter referred to herein.

Jefferies International Limited, which is authorised and regulated in the UK by the Financial Conduct Authority, is acting exclusively for FOGL and no one else in connection with the Combination and this announcement and will not be responsible to anyone other than FOGL for providing the protections afforded to clients of Jefferies nor for providing advice in connection with the Combination or any matter referred to herein.

This announcement is for information purposes only and does not constitute an offer to sell or an invitation to purchase any securities or the solicitation of an offer to buy securities, pursuant to the Combination or otherwise. The Combination will be made solely by means of the Scheme Document, which contains the full terms and conditions of the Combination, including details of how to vote in favour of the Scheme. Desire and FOGL urge Desire Shareholders to read the Scheme Document which is being distributed to Scheme Shareholders (with the exception of certain Scheme Shareholders in Restricted Jurisdictions), as it contains important information relating to the Combination.

This announcement does not constitute a prospectus or prospectus equivalent document.

This announcement has been prepared for the purpose of complying with English law and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

Overseas shareholders

The release, publication or distribution of this announcement, the FOGL Circular or the Scheme Document in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements.

Unless otherwise determined by FOGL or required by the Code and permitted by applicable law and regulation, the Combination will not be made, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and the Combination will not be capable of acceptance from or within a Restricted Jurisdiction. Accordingly, copies of this announcement and all documentation relating to the Combination are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this announcement and all documents relating to the Combination (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions as doing so may invalidate any purported acceptance of the Combination.

The availability of the Combination to Desire Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements.

Further details in relation to overseas Desire Shareholders are contained in the Scheme Document.

Publication on website

A copy of this announcement will be made available, free of charge subject to certain restrictions relating to persons resident in Restricted Jurisdictions, at www.fogl.com and www.desireplc.co.uk by no later than 12 noon (London time) on the business day following the date of this announcement.

You may request a hard copy of this announcement, free of charge, by contacting Capita Registrars on +44 (0) 871 664 0300.