Falkland Islands: FIH Supports FOGL’s Exploration Campaign
Yesterday, on 12 January 2012, Falkland Islands Holdings plc (FIH) agreed to participate in the placing of new shares by FOGL by subscribing for 2 million new shares. The £860,000 cost of the shares will be met from the Group’s existing cash resources and the purchase will be undertaken by the Group’s Falkland based subsidiary, Erebus Limited.
Following the purchase, the Group will own 14 million shares in FOGL, equivalent to 4.4% of FOGL’s enlarged share capital. That shareholding will have an aggregate book cost of £2.8million equivalent to 20.2p per FOGL share.
FIH’s shareholding in FOGL is subject to an agreement that restricts FIH from selling FOGL shares prior to 31 May 2012 without the consent of FOGL’s broker.
FIH Chairman, David Hudd said:
“We are pleased to support FOGL’s exploration activity in the South and East Falkland Basins by subscribing to FOGL’s fundraising and to have increased our shareholding at an attractive price prior to the commencement of the drilling programme.
“It has always been part of FIH’s strategy to assist, and to seek to benefit from, oil exploration and development in the Falkland Islands through our support services businesses there, as well as through our substantial shareholding in FOGL. With the Leiv Eiriksson oil rig arriving in the Falklands later this month, we believe that this is an opportune time to increase our exposure to FOGL’s drilling programme without compromising the financial strength of the Group.
“Shareholders in FIH now have an effective interest in 1.5 FOGL shares for every FIH share they own.”
FOGL, the oil and gas exploration company focused on its extensive licence areas to the South and East of the Falkland Islands, in December announced that Cairn Energy released Leiv Eiriksson rig, and that the rig was en route to the Falkland Islands for for the FOGL’s upscoming drilling programme.
The rig is expected to arrive within the next ten days. FOGL will have access to the rig for the third and fourth slots in the combined Borders & Southern plc (“B&S”) and FOGL drilling programme and expects to commence drilling its Loligo prospect in the Northern license area in early May 2012. The Environmental Impact Statement for Loligo was approved by the Falkland Islands Government on 24 December 2011 and well planning is now in its final stage.
Offshore Energy Today Staff, January 13, 2012; Image:Ocean Rig