SHARE OPTION PLAN, LONG TERM INCENTIVE PLAN AWARDS

30 January 2014

Falkland Oil and Gas Limited

("FOGL" or "the Company")

FOGL SHARE OPTION PLAN AND LONG TERM INCENTIVE PLAN AWARDS

FOGL, the oil & gas exploration company focused on its extensive licence areas to the North, South and East of the Falkland Islands, announces the following arrangements in respect of 2013 awards to be made under its Share Option Plan and its Long Term Incentive Plan for executive directors:-

THE FOGL SHARE OPTION PLAN:

Awards are granted under the FOGL Share Option Plan as options with a market value exercise price. 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 2010 has now lapsed and the Board has approved the granting of replacement options as follows:

Vesting Performance Conditions: Market value options will vest according to absolute share price growth calculated over three years. Growth under 50% will not be rewarded. Growth of 50% will result in vesting of 25% of the total award. Growth of 125% will result in vesting of 100% of the total award. Vesting will follow a linear relationship between 25% growth and 125% growth. Continued employment with FOGL is required for vesting.

Exercise Period: Awards 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 2013 award is 25p, being the share price as at close on 28th January 2014.

Awards: In accordance with the scheme rules, the following grants were awarded on 29th January 2014:

Tim Bushell - 2,947,200 market value options have been awarded, calculated as the value of the salary multiple of the lapsed options of £736,800, divided by the exercise price of 25p.

Colin More - 2,480,240 market value options have been awarded, calculated as the value of the salary multiple of the lapsed options of £620,060, divided by the exercise price of 25p.

THE FOGL LONG TERM INCENTIVE PLAN (LTIP):

Awards are granted under the FOGL LTIP as a combination of restricted shares and market value options. Each year, at the discretion of the Remuneration Committee a new grant is awarded. For 2013, new grants of restricted shares of 50% annual salary and market value options of 100% annual salary have been approved as follows:

Conditions: The conditions described above for the market value options awarded under the Share Option Plan in relation to Vesting and Performance Conditions, Exercise Period and Exercise Price, apply also to restricted shares and market value options awarded under the LTIP.

Awards: In accordance with the scheme rules, grants have been awarded to Tim Bushell and Colin More on 29th January 2014, as follows:-

Tim Bushell

· 491,200 restricted shares have been awarded, calculated as 50% annual salary divided by the Company's share price as at close on 28th January 2014.

· 982,400 market value options have been awarded, calculated as 100% annual salary divided by the Exercise Price of 25p.

Colin More

· 442,900 restricted shares have been awarded, calculated as 50% annual salary divided by the Company's share price as at close on 28th January 2014.

· 885,800 market value options have been awarded, calculated as 100% annual salary divided by the Exercise Price of 25p.

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