Falkland Oil & Gas (LON:FOGL), the exploration company operating in the Falkland Islands, has set out its plans to begin work again following the disappointment last July of a dry well drilled on the Toroa prospect. The company said it was set to carry out a site survey of its 100% owned southern licences during the first half of this year and may conduct a 1,300km 2D seismic survey in order to help it identify new prospects. Negotiations are understood to be underway over contracting a deepwater rig ahead of further exploration drilling.

The move is important to FOGL because its original 51% partner on the southern licences BHP Billiton (LON:BLT), withdrew from the second phase of commitments in the aftermath of the Toroa well. FOGL also holds a 49% interest in licences collectively referred to as the northern licences in which BHP still holds 51% and is operator. Shares in the company surged to 243.5p ahead of Toroa but collapsed to 95.5p soon afterwards. Today the Falkland Oil and Gas share price rose by 2.9% to 98.5p.

FOGL is now planning to start a site survey programme in late February in which a vessel will undertake surveys on a number of separate sites including Vinson, in the Tertiary channel play, and a prospect within the mid Cretaceous fan play that will be selected on the basis of work currently being undertaken. The company is also considering a site survey on Inflexible, a Springhill fault-block and Undine, a prospect in the Tertiary fold-belt play. These prospects are similar to those that FOGL’s fellow Falklands oil explorer Borders & Southern Petroleum (LON:BOR) intends to drill later this year. One of the aims of the site survey programme is to develop options to drill such prospects in the event that Borders & Southern has encouraging drilling results. In addition the company may elect to acquire up to 1,300 km of new 2D seismic data, using the same vessel. This data will assist with prospect definition and aid the selection of drilling locations.

FOGL’s Toroa F61/5-1 exploration well was drilled to a total depth of 2476 metres but did not encounter any reservoired hydrocarbons and was plugged and abandoned. In today’s update, the company…

Unlock the rest of this article with a 14 day trial

Unlock with Email
Unlock with Google

Already have an account?
Login here