Operations Update

6 December 2012

Falkland Oil and Gas Limited

("FOGL")

Completion of Drilling Operations

FOGL, the oil and gas exploration company focused on its extensive licence areas to the South and East of the Falkland Islands, is pleased to announce the completion of the 2012 drilling programme.

The Scotia well (F31/12-01) has been successfully plugged and abandoned, bringing to an end FOGL's 2012 drilling programme. Both the Loligo and Scotia wells have been completed safely and within budget. The Leiv Eiriksson will now be demobilised and transit to Norway in the near future.

Tim Bushell, Chief Executive of FOGL, said:

"FOGL would like to thank all the contractors and their employees who have contributed to the planning and execution of the drilling campaign. In particular, we would like to thank AGR, Ocean Rig and the many other contractors on-board the Leiv Eiriksson and the support vessels in the Falklands for the excellent safety, environmental and operational performance achieved during the drilling campaign.

"We look forward to evaluating the results of the two wells drilled in 2012 and incorporating these, together with the output from the forthcoming 3D surveys, into our future drilling plans."

- Ends -

Enquiries:

Falkland Oil and Gas

 +44 (0) 207 563 1260

 Tim Bushell, Chief Executive

 Oriel (Nominated Advisor and Joint Broker)

 +44 (0) 207 710 7600

 David Arch / Gareth Price / Ashton Clanfield

 Jefferies Hoare Govett (Joint Broker)

 +44 (0) 207 029 8000

 Alex Grant / Chris Zeal / Graham Hertrich

 FTI Consulting

 +44 (0) 207 831 3113

 Ben Brewerton / Ed Westropp