8 June 2011

AGM presentation

Outline

• Toroa• BHP Billiton• Rig• Drilling programme & options• Licences• Operations• Funding and farmout

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Toroa: The first well in the East Falklands Basin

Well

Toroa Amplitude Anomaly

Toroa (F61/5-1)Drilled May-July 2010Water depth: 600 metres Total depth: 2600 metresTarget: Late Jurassic Springhill Sandstone

Seismic anomaly

CSEM anomaly

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Only prospect accessible using the Ocean Guardian due to water-depth

Reason for failure– Seismic amplitude & CSEM response caused by coals rather than hydrocarbons– Probably not a valid trap – no lateral seal (top seal was good)

Reservoir – Reasonable quality reservoir in Springhill target– Very good quality sands in Mid Cretaceous section

Source– 120 metres of shale with high organic carbon. – These shales are considered good quality source rock– Likely to be mature in deeper parts of the basin

Implications for future exploration– No impact on the risk of the Tertiary Channel play (Loligo etc.)– Sand thickness & quality positive for Mid Cretaceous play – No suggestion that the petroleum system isn’t working – Same seismic pitfall very unlikely in deep-water prospects, different type of AVO response,

different depositional environment

Toroa: results

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Toroa

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BHP Billiton• BHP Billiton farmed in 2007 paid US$13 million & 68% of all exploration costs to earn a 51% interest

• The joint venture has since spent over US$110 million, resulting in a net saving to FOGL of

US$75 million due to the farm-in carry

• BHPB have made a strategic decision to exit the Falklands

• Agreed that BHPB will make a US$40 million contribution to the cost of the Loligo well

• BHPB retain a back-in right for up to 40% on the Loligo prospect only

• BHPB’s involvement has saved FOGL shareholders c.$128 million = £80 million

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The rig• The Leiv Eiriksson is a 5th generation semi-submersible drilling rig

• It is designed to drill in water depths down to 3,000 metres & remains stable in rough weather conditions owing to its advanced dynamic positioning system

• It is designed for year-round operations in harsh weather areas such as offshore Canada and northern Norway. It is operating in Greenland for Cairn prior to the Falklands

• Due to arrive in the Falklands in Q4 2011 to drill 2 wells for Borders & Southern (B&S)

• FOGL has contracted the rig for 2 firm drilling slots, which will follow the 2 B&S wells

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Multiple play types

SpringhillPlay

The Springhill Sandstone is the main productive play in the contiguous Magallanes Basin, Argentina

Mid CretaceousFan Play

The Cretaceous fan play is analogous to successful fan plays in West Africa, such as the Jubilee field, Ghana

TertiaryChannel Play

The Tertiary play is analogous to the successful Tertiary deep water play of the Campos Basin, Brazil

EastFoldbelt play

Borders & Southern plan to drill Stebbing in Q4 2011. FOGL has look-alike prospects such as Undine

Schematic cross section through our licence area

1,50

0 –

5,00

0 ft

DarwinInflexible

Toroa

Loligo, Nimrod, Vinson

Hersilia, Hero, Scotia

StebbingUndine

x

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Darwin

Stebbing

Toroa

Prospects & options

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Drilling programme• FOGL is currently planning a 2 well programme commencing in Q1 2012 • First well on Loligo, identity of 2nd well dependent on results

Loligo appraisal

Loligo4700* mmbbls

First well

Successful result

Disappointing result

Inflexible253* mmbbls

Nimrod1500* mmbbls

Options

Vinson733* mmbls

Dependent on Borders & Southern’s Darwin result

Scotia1062* mmbbls

Hero1071* mmbbls

10* Pmean prospective resources (mmbbls)

Play openers

Loligo

Scotia

Darwin (B&S)

Stebbing B&S)

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Prospect Hopper

FOGL prospects

Play Licence Area Pmean Prospective Resources

Loligo Tertiary Channel Northern 4700

Nimrod Tertiary Channel Northern 1500

Vinson Tertiary Channel Southern 733

Lucky Tertiary Channel Northern 660

Windmills Tertiary Channel Northern 402

Scotia Mid Cretaceous Fan Northern 1062

Hero Mid Cretaceous Fan Northern 1071

Hersilia Mid Cretaceous Fan Northern 1300

Quest Mid Cretaceous Fan Northern 1400

Inflexible Springhill Southern 253

Lutra Springhill Southern 900

Thulla Springhill Southern 632

Endeavour Springhill Northern 800

Endurance Springhill Northern 204

Undine Foldbelt Southern 298

Lead A Foldbelt Southern 380

Lead B Foldbelt Southern 405

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Loligo

Hersilia ComplexHersilia, Hero and Scotia are 3 large prospects in the Mid Cretaceous Fan play

Scotia – 1.06 billions barrels mean prospective resourcesHero – 1.07 billion barrels mean prospective resources Same play type as Tullow GhanaStrong seismic amplitude support (AVO class II)Reservoir sits just above mature oil source rock

Loligo Squid

Fluid factor (AVO attribute) seismic display – massive standout on Scotia

HERSILIA

Fluid factor (AVO attribute) map display –massive standout on Scotia

Mid Cretaceous reservoir

Aptian Source rock13

Licences

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Southern Area Licences• Entered Phase 2 in December 2010

• Expire 30 December 2015

• Commitment to drill 1 exploration well by end of Phase 2

Northern Area Licences• Due to expire 15 December 2011

• 6 month extension granted

• c.20% relinquishment required at end of 2011

• Enter Phase 2 at end of Loligo well

• Expires 15 December 2015

• Commitment to drill 1 exploration well by end of Phase 2

Operations

Health, Safety & Environment

Wellsite Geologists RPSEnvironment &

Surveys

Mike ThomasOperations Manager

Richard ClarkeDrilling Engineer

Aberdeen Stanley

AGR Ken LeachLogistics Manager

Drilling Superintendents

Dave MackayDrilling Manager

Colin MoreExploration Director

Tim BushellCEO

FOGLBoard

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Costs• FOGL has sufficient funds (c.$160 million) to drill a deep well on Loligo and a second well

from: Loligo (appraisal), Nimrod, Vinson or Inflexible

• FOGL is not fully funded for a second well on Scotia or Hero

Mobilisation costs

• Rig & equipment mobilisation: c.$60 million gross (shared with Borders & Southern)

Well costs:

• Loligo (4000m TD, est. duration 50 days): c.$65 million

• Nimrod/Vinson/ Inflexible: (3000m TD, est. duration 40~45 days): c.$45~55 million

• Scotia/Hero: (5000m TD, est. duration 65 days): c.$80 million

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Farmout

• Received several expressions of interest during 2010• Until March 2011 not actively looking for a farminee• Now in discussion with these parties• Plan to market to additional parties during Q3• Need to preserve 40% in Loligo, for BHP back-in option• Aim to secure additional funding for a well on one of the Mid Cretaceous

prospects (Scotia or Hero)• FOGL will retain operatorship

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What’s next?• Farmout: Potentially H2 2011• Deepwater rig mobilisation to/arrival in the Falklands, Q4 2011• Borders & Southern results from Darwin & Stebbing prospects• Loligo in Q1 2012,• Second well Q2 2012

• Additional Falkland factors• On-going drilling results in the North Falkland Basin –• Rockhopper Sealion appraisal drilling, plus further exploration wells• Drilling with Ocean Guardian expected to continue to end 2011

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Summary• Huge prospective resource

• Rig contracted for 2 well programme, commencing in Q1 2012

• Multiple drilling options: 6 different prospects with site surveys

• Multi-billion barrel targets to be tested, starting with Loligo

The results of 4 wells to be drilled during 2011/2012 could open a new commercial petroleum province with multi-billion barrel potential

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