FOGL agrees to offshore Falkland farmout terms

Offshore staff

LONDON – Falkland Oil and Gas Ltd. (FOGL) has entered a farmout agreement with an unnamed party for its licenses south and east of the Falkland Islands.

The potential partner also has an option for an associated joint operating agreement (JOA), although FOGL would retain license operatorship. FOGL expects confirmation of the farm-out within the next two months, prior to the start of its latest drilling program.

Under the agreement, the counterparty would take a 25% interest in FOGL’s license areas and contribute its share of costs for two planned exploration wells in 2012. It would also pay a share of costs incurred last year in preparation for drilling.

FOGL expects to receive the semisub Leiv Eiriksson in June after it has drilled the first two wells’ of Borders & Southern Petroleum’s Falkland campaign on the Darwin and Stebbing prospects. Rig issues interrupted progress on Darwin, and operations here could take another four to five weeks to complete.

3/20/2012

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