FOGL seeks to create transformational shareholder value by pursuing a successful exploration programme in its licences to the South and East of the Falkland Islands. FOGL is also focused on the prudent use of shareholder funds and aims to spread the exploration risk by partnering with other oil companies, to maximise the Company’s capital resources.
In 2012 FOGL and its co-venture partners drilled two exploration wells on the Loligo and Scotia prospects. Both wells discovered gas. The Loligo discovery is potentially very significant with an estimated in place gas volume of between 50 and 100 Trillion cubic feet (TCF). Given the encouragement from the 2012 drilling programme the joint venture is currently embarking on a major 10,000 square kilometre 3D seismic acquisition programme and is planning to undertake further exploration drilling in 2014.
A key focus for the joint venture is exploring for oil. Analysis of the 2012 drilling results has been used to identify areas within the basin that are the most prospective for oil. The new 3D seismic will substantially enhance our ability to differentiate oil from gas prospects and will also, be invaluable for identifying where the best quality reservoir is developed.
Given the potential gas volumes within both Loligo and elsewhere within the Tertiary Channel Play, options to commercialise gas and associated liquids are currently being considered. These include land based and floating liquefied natural gas (LNG) projects.
A suitable deepwater rig is currently being sought to undertake further exploration drilling in the second half of 2014. Subject to the 3D seismic results it is expected that up to four wells will be drilled in this next campaign.
Next Phase of drilling
The next phase of drilling is planned for second half 2014. Noble Energy is currently looking to secure a suitable deepwater rig for a three well drilling programme. In addition FOGL may elect to drill a further well on Loligo, but will be subject to on-going technical and commercial work.
FOGL's current cash position is c. $220 million.
The Company’s share of the 2013-14 3D programme is expected to be approximately $60 million and its share of a three well drilling programme (including the Noble carry on the first two wells) is estimated to be approximately $100 million.