AGM presentation

8 June 2011

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

Toroa: The first well in the East Falklands Basin

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

Seismic anomaly
Toroa Amplitude Anomaly

CSEM anomaly

Toroa: results
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 isnt working Same seismic pitfall very unlikely in deep-water prospects, different type of AVO response, different depositional environment

Toroa

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 BHPBs involvement has saved FOGL shareholders c.$128 million = 80

million

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

Multiple play types

The Cretaceous fan play is analogous to successful fan plays in West Africa, such as the Jubilee field, Ghana
1,500 5,000 ft

Mid Cretaceous Fan Play

Tertiary Channel Play

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

Loligo, Nimrod, Vinson

x
Toroa Hersilia, Hero, Scotia

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

Darwin Inflexible

Stebbing Undine

Schematic cross section through our licence area

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

East

Prospects & options

Toroa

Darwin Stebbing 9

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
First well Successful result Disappointing result Options Loligo appraisal Nimrod 1500* mmbbls Vinson 733* mmbls Scotia 1062* mmbbls Hero 1071* mmbbls Inflexible 253* mmbbls

Loligo 4700* mmbbls

Dependent on Borders & Southerns Darwin result

* Pmean prospective resources (mmbbls)

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Play openers
Prospect Hopper FOGL prospects Play Licence Area Pmean Prospective Resources
4700 1500 733 660 402 1062 1071 1300 1400 253 900 632 800 204 298 380 405

Loligo

Loligo Nimrod Vinson Lucky Windmills

Tertiary Channel Tertiary Channel Tertiary Channel Tertiary Channel Tertiary Channel Mid Cretaceous Fan Mid Cretaceous Fan Mid Cretaceous Fan Mid Cretaceous Fan Springhill Springhill Springhill Springhill Springhill Foldbelt Foldbelt Foldbelt

Northern Northern Southern Northern Northern Northern Northern Northern Northern Southern Southern Southern Northern Northern Southern Southern Southern

Scotia

Scotia Hero Hersilia Quest

Darwin (B&S)

Inflexible Lutra Thulla Endeavour Endurance

Stebbing B&S)

Undine Lead A Lead B

15915

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Loligo

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

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

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

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

Mid Cretaceous reservoir

Loligo Squid

Aptian Source rock

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Licences
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

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Operations
FOGL Board Health, Safety & Environment

Tim Bushell CEO

Colin More Exploration Director

Mike Thomas Operations Manager

Dave Mackay Drilling Manager

Wellsite Geologists

RPS Environment & Surveys

Richard Clarke Drilling Engineer

AGR

Ken Leach Logistics Manager

Drilling Superintendents

Aberdeen

Stanley

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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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Whats 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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