FOGL.L Regulatory News (FOGL)

13 April 2015

Falkland Oil and Gas Limited

("FOGL" or the "Company")

Change to drilling programme

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, announces that Noble Energy ("Noble") and its joint venture partners FOGL and Edison International ("Edison") have elected to defer a potential second well in the South and East Falkland basin.

The joint venture partners have concluded; having taken into account a number of factors, that the optimum course of action is to defer the drilling of a second well in the southern basin. In these circumstances FOGL was amenable to a proposal from Noble, that in order to fulfil the drilling commitment, they should utilise the contracted drilling slot to drill a well in the North Falklands Basin.

This revised drilling programme will mean the joint venture partners:

· Have more time to fully assess the Humpback results, and given encouragement, plan further exploration and appraisal wells

· Can potentially take advantage of lower future drilling costs

· Will be able to complete the technical assessment of the Scharnhorst and Starfish prospects and determine whether they are suitable future drilling targets in light of the Humpback results.

· Additionally, it will also result in FOGL being in a stronger financial position at the end of the current drilling programme.

Noble, Edison and FOGL remain fully committed to exploration in the South and East basin and still firmly believe in its prospectivity. The well on the Humpback prospect is considered by the joint venture partners to be the prime 'play opening' well. It is an important test of concept, in terms of evaluating the Cretaceous deepwater fan play and the presence of oil within the Fitzroy sub-basin. Humpback is located near a cluster of similar prospects totalling over one billion barrels of oil. The operator estimates that the Humpback prospect contains between 250 and 650 mmbbls of gross prospective resources (un-risked). If the initial drilling results are encouraging, the joint venture partners will look to fully appraise Humpback and drill other similar prospects within the play area. Such further exploration and appraisal drilling would be part of a future campaign, with wells on either Scharnhorst and/or Starfish also possibly forming part of such a programme.

This decision does not impact any existing agreements between FOGL and Noble. In the event that another exploration well is drilled after Humpback, within the joint venture's licence area, FOGL would still retain a partial carry of the drilling costs under the terms of the Noble farm out agreement.

FOGL is fully funded for the firm four wells and will be left in a stronger and more sustainable financial position as a result of this decision

Following this agreement, the revised drilling schedule is:

1. Zebedee: FOGL 40.0% interest (successful well result announced 2 April 2015)

2. Isobel Deep: FOGL 40.0% interest (in progress)

3. Humpback: FOGL 52.5% interest (estimated commencement in May 2015)

4. Jayne East: FOGL 40.0% interest

5. Chatham: No FOGL interest

6. Rhea: No FOGL interest

Tim Bushell, CEO, FOGL, commented:

"We are very satisfied with this alternative plan for the exploration of the South and East Falklands basins which provides more time to fully utilise the extensive 3D seismic dataset, assimilate the results of the Humpback well and take advantage of the lower rig and services costs that may prevail.

"The Board of FOGL considers that the actions taken are in the best interests of shareholders. We believe that disciplined capital management is crucial in the current oil price environment and this decision leaves FOGL in a stronger financial position.

"FOGL has retained significant exposure to a very exciting four well drilling programme which commenced with a significant oil discovery at the Zebedee prospect. Positive results from any of the following wells could add significantly to a growing reserve base".

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