Falkland O&G (LSE:FOGL)
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1 Year : From Jun 2012 to Jun 2013
LONDON--Falkland Oil and Gas Ltd. (FOGL.LN), an oil and gas exploration company focused on its extensive license areas to the South and East of the Falkland Islands, confirms Tuesday that the farm out agreement announced on March 20 is with Edison International S.p.a.
-On March 20, Falkland Oil and Gas, or FOGL, announced that it had granted an option to enter into a farm out agreement to an industry counterparty; that counterparty was Edison which was unable to conclude the farm out agreement at that time as it was undertaking a corporate reorganization which led to EDF becoming a controlling shareholder.
-Under the farm out agreement:
* Edison will farm in and earn a 25% interest in FOGL's northern area licenses; Edison will contribute its pro-rata share of the costs of the 2012 drilling program, comprising two exploration wells.
* Edison will farm in and earn a 12.5% interest in FOGL's southern area licenses and will contribute its pro-rata share of the 2012 work program.
* Edison will also pay its pro-rata share of certain historical costs incurred by FOGL during 2011 related to the 2012 drilling program.
* Edison's share of historical expenditures, together with their share of the 2012 drilling program costs, are expected to be of the order of $50 million.
* In addition Edison will make a separate cash contribution to FOGL of 40 million dollars; $20 million on completion of the FOA and a further $20 million in 2013.
* In order to obtain the option, Edison had already paid a $3 million non-refundable fee.
* FOGL will retain operatorship of the northern and southern area licenses.
-FOGL will now consider acquiring a 3D seismic survey over a portion of the southern area licenses in order to evaluate possible future drilling targets.
-FOGL now expects to receive the Leiv Eiriksson rig in July following completion of the drilling of the Borders & Southern Petroleum PLC, or B&S, Stebbing well.
-FOGL intends to drill its first well on the Loligo prospect and the second well will be selected based on the Loligo well results.
-FOGL shares at 0715 GMT up 1 pence, or 0.85%, at 89.25 pence valuing the company at 283.2 million pounds.
-Write to Ian Walker at firstname.lastname@example.org