investor presentation sept_2014

Investor Presentation – September 2014

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Falkland Oil and Gas Limited

Geographic Focus

• Purely focussed on exploration offshore the Falkland Islands• Only Falkland explorer operating in both the North & South Basins• Largest licence holder of all Falkland explorers

Exciting Portfolio

• South and East Falkland Basin offers high impact drilling opportunities• North Falkland Basin offers lower risk ‘step-out’ exploration and appraisal • Significant interest in the Sea Lion oil development project

ActiveDrilling Programme

• Eirik Raude deepwater rig contracted – drilling commences Q1 2015• Fully funded to drill 5 wells• Biggest player in 2015 drilling programme

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Only explorer operating in both the North & South Basins• Net interest of over 40,000 sq.km

• Material interest (40%+) in all licences

• Experienced operators• Noble Energy• Premier Oil

• Over 12,000 sq.km 3D survey completed

• Rig contract signed with Ocean Rig to use the Eirik Raude on a multi-well campaign

• 5 well programme commencing in Q1 2015 targeting over 1.3 billion barrels of gross prospective resources

2004 licencesFOGL: 40%Noble (op.) 35%Edison: 25%

2002 licencesFOGL: 52.50%Noble (op.) 35.0%Edison: 12.5%

FOGL: 40%

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FOGL’s South & East Basin Licences

2010 & 2012 drilling• 5 wells drilled: 4 found gas or condensate• Proved a working hydrocarbon system • Good quality source rocks • Good quality Cretaceous reservoirs

Toroa

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Major 3D seismic acquisition programme completed

Major 3D acquisition programme

• >12,000 sq.km 3D survey completed

• 3 separate areas of interest:

• Diomedea Fan Complex• Cretaceous Fault Blocks• Hersilia Fan Complex

• Excellent data quality & imaging

• Step change in our understanding and ability to map prospective areas

Diomedea Fan Complex

Cretaceous Fault Blocks

Hersilia Fan Complex

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Prospect selection for 2015 drilling campaign

Seismic amplitude (AVO) response over Humpback from 3D dataset

Aims• Select initial prospect for first well• Select follow-up location(s) for second well and also options for

further drilling given sufficient encouragement

Prospect selection criteria• Maximise the chance of finding oil• Material volumetric potential & sufficient for a standalone

development (biggest is not always best)• Success will unlock (de-risk) other similar prospects and create

significant follow-on potential & upside• Best chance of success (lowest risk), with a focus on the

following key elements:• Robust trap, with attention to up-dip seal in stratigraphic traps• Good quality reservoir sands• Proximity to mature hydrocarbon source rocks• Seismic attributes (AVO) indicating likely presence of hydrocarbons

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Diomedea Fan Complex (FOGL 52.5%)

• A full re-evaluation of the basin has been conducted by the operator (Noble Energy)

• This incorporates all well results, the existing regional grid of 2D seismic and the new 3D datasets which are focused over the most prospective parts of the basin

• The key conclusion of this work is the main hydrocarbon phase in the Diomedea area is expected to be oil

• As a result of this oil potential, significant attention has be paid to mapping the new 3D data over Diomedea

• This work has yielded very encouraging results

Humpback

Finback

Stingray

Caperea

Minke

Immature PeakMature oil

EarlyMature oil

Migration pathway

3D

Cretaceous Source Rock Maturity Map

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• The Diomedea area comprises a large system of deep-water channels and fans

• 3D data has facilitated detailed mapping of multiple slope channel systems, where good quality Cretaceous reservoir sands are expected to be developed

• Many large prospects and leads have been mapped within this fan complex

• 5 potential drilling targets high-graded:

• Humpback: 510 mmbbls*• Stingray 266 mmbbls*• Finback: 232 mmbbls*• Caperea: 225 mmbbls*• Minke 240 mmbbls*

• Humpback likely to be initial target

Diomedea Fan Complex (FOGL 52.5%)

Prospects and Leads map

* Mid case gross prospective resources (un-risked) based on FOGL management estimates

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• Gross prospective resources: 510 mmbbls*• Humpback comprises a system of stacked

slope-channel reservoirs• Located up-slope from mature oil source kitchen• Up-dip seal mapped on 3D• Encouraging AVO response and hydrocarbon

indicators• Success will de-risk Finback, Caperea, Minke

and other leads within the Diomedea Fan Complex

• Risk assessment: moderate• Key risk: seal

Humpback (FOGL 52.5%)


Seismic amplitude map over Humpback from 3D dataset

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• The Darwin exploration well discovered gas and a rich condensate in good quality Cretaceous sands

• Numerous, similar features have been mapped in our adjacent licences.

• A 3D seismic survey was acquired in 2013 to better define some of these

• Seismic interpretation is on-going and final results are expected in Q4 2014

• Seismic amplitude responses indicate the possibility of different hydrocarbon phases, including oil

• Potential drilling candidates include:

• Scharnhorst North: 188 mmbbls• Nurnberg: Evaluation ongoing

Cretaceous Fault Blocks (FOGL 52.5%)

Fault Block play shown on an amplitude map generated from the new 3D seismic data


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• A large 5,750 sq.km 3D seismic survey acquired

• Prospect mapping is underway using the fast-track 3D seismic data

• Final processed data in Q4 2014

• Source rocks may be oil generative in the vicinity of Hersilia and West Hersilia

• The Loligo well proved the presence of large amounts of gas in the Tertiary Channel play & will be further evaluated

• 3 prospects have been identified using the 3D fast-rack data only. • Hersilia• West Hersilia• Challenger

• The final processed seismic data is required to complete our evaluation of this area

Hersilia Fan Complex and Loligo (FOGL 40%)

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• Interests in 5 licences

• PL004b (40% WI) contains Sea Lion southern extension

• Material exploration prospect stacks in PL004, PL003 & PL005

• Zebedee

• Jayne East

• Isobel

• Elaine

• Helen

• Susan

• Ann/Orca South

FOGL’s North Falkland Basin Licences

Jayne East

Elaine

Isobel

Zebedeewell location

Susan

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• The Sea Lion field straddles PL032 & PL004b

• FOGL estimate that c.30% of the Sea Lion oil-in-place lies within PL004b

• 85 mmbbls 2C resources net to FOGL (Senergy)

• Premier are proposing a two phased development concept, targeting the northern area first

• Further appraisal required in PL004b to determine resources distribution & potential: Zebedee will be the next key well

• In a success case up to 40% of Sealion oil-in-place could lie within PL004b

• FOGL has a significant stake in Sea Lion and unitisation discussions with the other field owners are ongoing

Sea Lion area

Zebedee Location

PL032

PL004b

Probable Gas Extent

Probable Oil Extent

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PL004b: Zebedee (FOGL 40%)

Source: Premier Oil Source: Premier Oil

Multiple stacked targets

Zebedee Location

• Gross prospective resources: 160 mmbbls F1 & F2 reservoirs* 121 mmbbls F3 reservoirs*

• Well to test 7 target horizons• The well will seek to extend the proven F2 sequence towards the

south and will also test deeper targets within the older F3 sequence• Risk assessment: low-moderate

Source: Premier Oil


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• Gross prospective resources: 240 mmbbls (Isobel deep only)*• Well will target Isobel deep• Success will de-risk Elaine North & South, Helen & Susan• Risk assessment: moderate • Key risk: up-dip seal & reservoir

PL004a Isobel & Elaine (FOGL 40%)

Elaine

Isobel

Jayne East

Susan

Source: Premier Oil

Isobel Deep amplitude and spectral decomposition displays

Feb 2014 CMD Presentation

Isobel DeepLocation


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• Gross prospective resources: 85 mmbbls*• Location provides potential to stack 5 fans• Risk assessment: moderate • Key risk: up-dip seal

PL04c: Jayne East (FOGL 40%)

Jayne East

Susan

Jayne East Location


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• Ocean Rig’s Eirik Raude contracted

• Rig to be mobilised to the Falklands in Q1 2015

• The drilling order of the ‘firm programme’ is expected to be:- Zebedee North Falkland Basin (NFB)- Isobel deep NFB- Humpback South Falkland Basin (SFB)- Second well (To be decided from a number of options) : SFB - Jayne East NFB- Chatham (Non-FOGL well): NFB

• Eirik Raude is a fifth generation harsh environment semi-submersible & sister ship to the Leiv Eirikssen that successfully operated offshore the Falklands in 2012

FOGL’s drilling programme

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Source: Premier Oil

• Option slots have been secured, to allow follow-up drilling on any successful results:- Up to 8 options available up to point of rig mobilisation- Options available during drilling on the basis of 1 option for every firm well completed & up to a maximum of 8 options

• Any option wells will be added on to the end of the firm drilling programme

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• FOGL has by far the largest exposure to the 2015 drilling programme:

Share of 6 well firm programme, based on drilling days*

- FOGL: 42%- Premier Oil: 19%- Noble Energy: 19%- Rockhopper: 13%- Edison International: 7%

• Participating in 5 out of 6 firm wells


* Calculation based on equity share of total firm drilling programme, currently estimated at 260 days

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• FOGL is funded through a 5 well drilling programme commencing in Q1 2015

• It is either partially or fully carried on 4 of the wells as a result of farm-out carry arrangements with Noble Energy, Premier Oil and Rockhopper Exploration

• Estimated gross well costs: Northern Basin well c.$50 millionSouthern Basin well c.$110 million

• Costs already incurred: $18 million net FOGL to end June 2014 (long lead equipment).

• At end June 2014 FOGL had pro-forma cash of $109 Million

• Impact of farm-outs Equity interest Paying interest

Zebedee 40.0% 40.0%Isobel Deep 40.0% 0%Jayne East 40.0% 0%Noble well 1 52.5% 27.5%Noble well 2 40.0% 30.0%* (assumes second well in Hersilia area)

• Expected cash position post firm drilling programme: c.$20~$30 million.

Funding

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• Excellent progress made towards next drilling campaign scheduled to start in Q1 2015

• Major 3D seismic acquisition programme completed in February 2014 and interpretation continues

• Eirik Raude deep-water rig contracted for the 2015 drilling campaign

• Five well drilling programme targeting over 1.3 billion barrels of gross prospective resources

• Interest of at least 40% in each licence ensures shareholders will have substantial equity exposure to these resources in the case of success

• Strong Financial Position• Cash Balance of $109 million at period end• Funded to undertake drilling programme of five wells commencing in Q12015

“We have made excellent progress in preparing for the drilling campaign which could transform the Company.”

“The Board of FOGL views the future with confidence as we look forward to commencing our drilling programme.”

Summary

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DisclaimerFALKLAND OIL AND GAS LIMITED

DISCLAIMERThis presentation is not and is not intended to be a prospectus and does not or is not intended to constitute or form part of any offer for sale or solicitation of any offer to buy or subscribe for any securities in Falkland Oil and Gas Limited (the "Company") in any jurisdiction. It shall not form the basis of, or be relied on in connection with, or act as invitation or inducement to enter into, any contract or commitment whatsoever. No offer of securities is being or will be made in circumstances which would require a prospectus or similar document to be approved.

While the information contained in this presentation, which does not purport to be comprehensive, is believed to be accurate, neither the Company nor any other person has conducted any investigation into or verified such information. No representation or warranty, express or implied, is or will be given by the Company or its directors, officers, employees or advisers or any other person as to the accuracy, completeness or fairness of this presentation and, so far as permitted by law and except in the case of fraud, no responsibility or liability whatsoever is accepted for the accuracy or sufficiency of any of the information contained in this presentation or for any errors, opinions, omissions or misstatements, negligent or otherwise relating to this presentation. Each recipient must conduct its own independent investigation and analysis of the Company and of the information contained in this presentation and bear all the costs of doing so.

This presentation may include certain "forward looking" statements which are based on expectations, projections and forecasts relating to the future performance of the Company. Such statements, projections and forecasts, which are intended as a guide only, represent the Company's own assessment and interpretation of information available to it at the date of this presentation and reflect significant assumptions and subjective judgements by the Company. A number of factors could cause actual results to differ materially from the potential results discussed in such forward looking statements, estimates and forecasts, including (but not limited to) changes in general economic and market conditions and all other risk factors (whether political, regulatory or otherwise) associated with offshore exploration, development and production. In all cases, recipients should conduct their own investigation and analysis of the information contained in this presentation. No representation or warranty is made or assurance given that the statements, projections and forecasts contained in this presentation will be borne out in practice or that the Company will perform as projected and the Company does not assume responsibility for verifying any of such statements, projections or forecasts. Neither the Company nor any persons shall be liable for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on any statement in or omission from this presentation.This presentation has been made available to recipients for information only. The Company gives no undertaking to provide the recipient with access to any additional information or to update this presentation or any additional information or to correct any inaccuracies in it which may become apparent.

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investor presentation sept_2014

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