Operational Update & Investor Presentation

21 November 2011

Falkland Oil and Gas Limited

("FOGL" or "the Company")

Operational Update and Investor Presentation

FOGL, the oil and gas exploration company focused on its extensive licence areas to the South and East of the Falkland Islands, has today posted a new investor presentation on its website (www.fogl.com) and provides an update on its operations.

The Company is awaiting the departure of the Leiv Eiriksson rig from Greenland and now expects it to arrive in the Falkland Islands in late January 2012. FOGL will have access to the rig for the third and fourth slots in the combined Borders & Southern and FOGL programme and expects to commence drilling in the second quarter of 2012 on its Loligo prospect in FOGL's Northern licence area.

Following a detailed review of its budgets and assumptions, FOGL has identified various drilling options and, based on geological, commercial and financial factors at the relevant time, the Company will decide which options to progress.

The Company remains funded to drill a well on Loligo and a second well on another Tertiary Channel target such as Nimrod or Vinson. Based on the latest projections, a second well is fully funded only in the event that a shallower well is drilled on Loligo.

The Company's current technical preference for the second well would be the Scotia prospect in the Mid Cretaceous Fan play. However, the feasibility of this option is dependent upon the Company securing additional funding and the priority of the Scotia prospect may change if information obtained from the Loligo well provides further justification for the drilling of a well on either Nimrod, Vinson, or a second well on Loligo. We may also consider drilling the Inflexible prospect if the results of the well drilled by Borders & Southern Petroleum plc ("Borders & Southern") on their Darwin prospect are encouraging.

The drilling approval process is on schedule. The environmental impact statement ("EIS") was presented at a public hearing in the Falkland Islands in September 2011 and final approval is expected by end 2011.

Well planning is also now at an advanced stage. This work is being carried out by FOGL, in conjunction with AGR Peak Well Management, and is focusing on drilling locations on Loligo, Scotia, Nimrod, Vinson and Inflexible.

The Company continues its discussions with a number of oil companies who have expressed an interest in participating in FOGL's exploration drilling programme, and a successful conclusion to these discussions would provide greater flexibility to the Company's drilling programme.

Separately, and further to the heads of Agreement signed with BHP Billiton ("BHPB") in March 2011, FOGL reports that an assignment agreement for the Northern licence area has been signed by FOGL and BHPB. This agreement has also received the approval of the Falkland Islands Governor. Whilst finalising this agreement it was agreed that BHPB would not to have the option to farm back into the Loligo development area.

Tim Bushell, Chief Executive of FOGL, said:

"Preparation for the forthcoming drilling campaign continues apace with the objective of providing as much flexibility as possible. We are in the fortunate position of having a number of high potential prospects across a range of different play types, from which to select the second well target. We will be able to take advantage of information gained from both Loligo and the wells being drilled by Borders & Southern in making this decision."

- Ends -

Enquiries:

In accordance with the AIM Rules, the information included in this announcement has been reviewed by Colin More BSc., MSc. (Exploration Director), who has over 25 years of experience in petroleum exploration. Mr More is a member of the Geological Society of London, the American Association of Petroleum Geologists and the Society of Exploration Geophysicists.

Note to Editors

FOGL is an AIM listed oil and gas exploration company operating in the South and East Falkland basins, potentially a new petroleum province in the South Atlantic.

The South and East Falkland basins are completely separate and geologically distinct from the North Falkland basin. The South and East Falkland basins cover a much larger area and have a significantly thicker sedimentary section, potentially allowing for the development of a variety of hydrocarbon 'plays' at different stratigraphic levels; but the basins also lie in deeper water (500 - 1800 metres). Geological analogues for the South and East Falkland basins are the passive margin basins of West Africa and Brazil.

FOGL has contracted the Leiv Eiriksson to drill 2 exploration wells in the first half of 2012. The rig is currently operating in Greenland for Cairn Energy where it is finalising work on the last well in their drilling programme. It will then depart for the Falkland Islands. The transit time is approximately 60 days. On arrival in the Falkland Islands it will commence a 2 well programme for Borders & Southern, drilling the Darwin and Stebbing prospects. FOGL will then use the rig to drill 2 wells, the first being on the Loligo prospect. FOGL has a number of potential options for the second well, further details of which can be found on the company's website.