FOGL declared an exploration update with respect to its license interests offshore the Falkland Islands and in particular to its 100% owned and operated southern licenses. FOGL also holds a 49% interest in licenses collectively referred to as the northern licenses in which BHP Billiton holds 51% and is operator.

Highlights Site Survey for FOGL's 100% owned southern licenses to commence in 1H 2011 1,300km of 2D seismic may also be acquired to assist with prospect definition and selection of drilling locations Negotiations are currently underway with respect to securing a suitable deep-water rig for drilling in FOGL's acreage Analysis of Toroa results shows no adverse implications for FOGL's deepwater prospects Site Survey In order to provide further drilling options across FOGL's acreage, FOGL will undertake a site survey program in the first half of 2011. The vessel is currently mobilizing to the Falklands and the survey program is expected to commence in late February 2011. The 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 Borders and Southern intends to drill later this year and one of the aims of the site survey program is to develop options to drill such prospects in the event that Borders and 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.

Data from the site surveys will be incorporated into environmental impact statements ("EIS"), to be submitted to the Falkland Islands Government ("FIG") later in 2011 as part of the approval process for drilling.

Tags: Falkland Oil and Gas Limited