LTIP and Share Option Scheme Awards

10 February 2015

Falkland Oil and Gas Limited

("FOGL" or "the Company")

FOGL LONG TERM INCENTIVE PLAN AND SHARE OPTION SCHEME AWARDS

FOGL, the oil and gas exploration company focused on its extensive licence areas to the North, South and East of the Falkland Islands, announces arrangements in respect of grants to be made under its Share Option Plan and its Long Term Incentive Plan:-

The FOGL Share Option Plan (SOP):

The grants under the FOGL Share Option Plan are options with a market value exercise price,a three-year performance period and a ten-year term. At the discretion of the Remuneration Committee, market value options are awarded to the executive directors as 'one-off' tranches of options up to a level of five times annual salary and as annual awards under the LTIP. From time to time the options granted as one-off awards are topped-up to maintain the five times salary multiple. The tranche of options awarded in December 2011 has now lapsed and the Board has approved the granting of replacement options as follows:

Vesting Performance Conditions: Market value options will vest only if absolute share price growth performance conditions are satisfied over a three-year period following the date of grant using the average closing price for the thirty days preceding the end of the three years performance period. Continued employment with FOGL is required for vesting.

Exercise Period: Grants vested may be exercised up to ten years from the date of award.

Exercise Price: The exercise price for the market value options for the 2014 grant is 27p, being the share price as at close on 9 February 2015.

Awards: In accordance with the scheme rules, the following grants were made on 10 February 2015:

Tim Bushell - 1,925,926 market value options have been granted, calculated as the value of the salary multiple of the lapsed options of £520,000, divided by the exercise price.

Colin More - 1,751,481 market value options have been granted, calculated as the value of the salary multiple of the lapsed options of £472,900, divided by the exercise price.

The FOGL Long Term Incentive Plan (LTIP):

The grants under the FOGL LTIP are market value options as described under the SOP above, and restricted shares (par value options). The restricted shares also have a three-year performance period and a ten-year term. Each year, at the discretion of the Remuneration Committee, a new grant is made, and for 2015 new grants have been approved for executive directors as follows:

The Size of Grant: Grants are made of restricted shares up to a maximum of 50% of annual salary, and market value options up to a maximum of 100% of annual salary.

Vesting Performance Conditions:Restricted shares will vest only if share price growth performance conditions measured against a group of peer companies are satisfied over a three-year period following the date of grant using the average closing price for the thirty days preceding the end of the three years performance period. Continued employment with FOGL is required for vesting.

Exercise Period: Grants vested may be exercised up to ten years from the date of grant.

Awards: In accordance with the scheme rules, grants have been made to Tim Bushell and Colin More on 10 February 2015, as follows:-

Tim Bushell - 481,481 restricted shares have been granted, calculated as 50% annual salary divided by the Company's share price as at close on 9 February 2015. 962,963 market value options have been granted, calculated as 100% annual salary divided by the exercise price.

Colin More - 437,870 restricted shares have been granted, calculated as 50% annual salary divided by the Company's share price as at close on 9 February 2015. 875,741 market value options have been granted, calculated as 100% annual salary divided by the exercise price.

Following this grant of options, Tim Bushell will hold 7,561,346 market value share options granted under the SOP and 1,344,110 restricted shares granted under the LTIP. Colin More will hold 6,661,833 market value share options granted under the SOP and 1,300,499 restricted shares granted under the LTIP.

- Ends -

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