Re FOGL Announcement

13 Dec 2007 10:29

Global Petroleum Ltd13 December 2007 13 December 2007 FALKLAND OIL & GAS LIMITED ANNOUNCEMENT Global Petroleum Limited advise that Falkland Oil & Gas Limited ("FOGL") hasreleased an Exploration Activity Update. The full announcement appearshereunder. Mark SavageChairman Telephone: +1505 344 2822Fax: +1505 344 2922Email: marksavage@comcast.net Falkland Oil and Gas Limited Exploration Activity Update Falkland Oil and Gas Limited ("FOGL" or the "Company") is pleased to provide thefollowing update on its Falkland Islands exploration programme and in particularthe results from the two surveys acquired during 2007: Highlights • Encouraging results from the Controlled Source Electromagnetic ("CSEM") survey. • Positive CSEM anomalies, indicating the possible presence of trapped hydrocarbons. • Improved definition of our top ranked prospects, as a result of the 2D infill seismic survey. • FOGL's top ranked prospects have the potential to contain hydrocarbon resources in excess of 10 billion barrels oil equivalent (mean, un-risked) CSEM Survey The CSEM survey was carried out on behalf of FOGL by Offshore HydrocarbonMapping plc and was completed in August 2007. Over 750 kms of CSEM data wereacquired along 7 lines, over a total of 12 prospects. This programme exceededthe Company's Licence commitment to the Falkland Islands Government. Basic processing is now complete on all lines, and enhanced processing andinterpretation, will continue over the next few months. The CSEM data has nowbeen combined with FOGL's seismic interpretation and images, in order tohighlight prospects of interest. 2D Infill seismic survey The FOGL proprietary 2D seismic survey was acquired by Wavefield Inseis ASbetween 19 November 2006 and 31 May 2007 and a total of 9,950km were acquired:5215 km in the 2002 licences and 4735 km in the 2004 licences. Survey Results CSEM Results from the CSEM survey are encouraging, with 'positive' CSEM anomalies,indicating the possible presence of trapped hydrocarbons, being recognised overa number of our best prospects. The most encouraging CSEM anomalies have been identified over the following 7prospects: Loligo, Garrodia, Nimrod, Caird, Toroa, Lutra and Undine. Theseprospects also benefit from seismically derived direct hydrocarbon indications.All of these features could contain large amounts of oil and gas, withindividual prospects containing potential recoverable volumes (mean un-riskedresources) ranging up to 3,500 million barrels. FOGL has focussed its work during the last year on a shortlist of ten prospects,which promise to offer the lowest exploration risk and largest resource volumes.This prospect inventory has the potential to hold, on a cumulative basis, inexcess of 10 billion barrels oil equivalent (mean, un-risked resources). Inaddition, FOGL has identified over 90 other leads, which are not included inthis estimate. 2D seismic infill The 2007 2D survey was designed to infill the existing seismic grid in order tobetter define known leads and prospects. The new data has led to theidentification of a significant new lead, located in quadrant 61. Other leadshave been matured into substantial prospects. New seismic was also acquired overthe fold-belt play and a seismic amplitude response combined with an attractivestructural style, led to the decision to acquire additional CSEM data overanother new lead. The new seismic data have been carefully processed to preserve 'true amplitude'and a suite of AVO products is currently being produced from this dataset. Theseseismic products, which have the potential to be direct hydrocarbon indicators,will be generated over each prospect and the results, combined with the CSEMdata, will determine a final prospect risk. This work will help prioritise thebest prospects for drilling. In summary, many of our top ranked prospects have seismic amplitude support, AVOresponses and positive CSEM anomalies. Licence Terms The Falkland Islands Government (FIG) has consented to the assignment of a 51%licence interest to BHP Billiton and the approval of BHP Billiton as licenceoperator. All parties envisage the execution of formal documents to finalisethis will occur shortly. Under the revised Licence terms agreed by FIG, Phase 1 of the licences will beextended by 3 years until December 2010 and Phase 2 extended by 2 years, untilDecember 2015. In return FOGL and BHP Billiton have agreed to make a 50%relinquishment of Area B (PPL30 and PPL31) of the 2004 licences and a 25%relinquishment of Area A of the 2004 licences (PPL 25 - PPL 29 inclusive). Allsignificant leads and prospects have, in the opinion of the FOGL, been retainedwithin the 2004 licence area. The retained area of the 2004 licences will becombined into a single administrative unit, with a total area of 34,336 squarekilometres. No further relinquishment of the 2002 licences will be required aspart of these changes. The total retained area of the 2002 and 2004 licencescomprises 48,853 square kilometres, equivalent to over 220 UK North Sea blocks. Forward plan The results of the CSEM survey will be fully integrated with our existing workand with the recent 2D infill seismic in order to produce, a short list of thebest prospects for drilling. This work will now be carried out in conjunctionwith our farm-in partner, BHP Billiton, who will take over operatorship of thelicences from 1 January 2008. Seabed coring and site surveys are expected to becarried out in 2008. BHP Billiton is currently reviewing a number of potentialrig options and an update on this will be provided at a future point. Tim Bushell, Chief Executive of FOGL commented: "We are delighted with the results of our 2007 exploration programme. We havenow identified a number of prospects that are seismically well defined and alsohave positive CSEM evidence for the presence of trapped hydrocarbons.Furthermore, all of these prospects have substantial reserve potential. Theresults of the CSEM and 2D seismic infill surveys have reduced exploration riskand have considerably improved the chances of finding commercial quantities ofoil and gas within our licences." 13 December 2007 Enquiries: FOGL 020 7563 1260Tim Bushell, Chief Executive KBC Peel Hunt (Nominated Adviser) 020 7418 8900Jonathan Marren / Matt Goode College Hill 020 7457 2020Nick Elwes / Paddy Blewer www.fogl.com Notes The results of the Company's technical evaluation have been reviewed, verifiedand compiled by the Company's geological staff, which includes a qualifiedperson, Colin More BSc., MSc. (Exploration Manager), who has over 25 years ofexperience in petroleum exploration, for the purpose of the Guidance Note forMining, Oil and Gas Companies issued by the London Stock Exchange in respect ofAIM companies, which outline standards of disclosure for mineral projects END This information is provided by RNS The company news service from the London Stock Exchange