Falkland Oil enters 'exciting phase'

Falkland Oil and Gas (FOGL) pared back its losses in the first half and said it had moved into a very exciting phase for the business.

The firm, which is exploring to the South and East of the Falkland Islands, posted a loss of $0.2m, a significant improvement on the previous year when it was $3.6m in the red.

Bank deposits at the end of June were $220.7m of which 17% were held in Sterling.

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On the basis that two wells are drilled within budget, the firm estimates its cash balance after the 2012 exploration campaign will be over $200m.

Chairman Richard Liddell said the first half of 2012 was a very significant period in the development of the business, with an equity issue raising gross proceeds of £48.5m in January 2012 and subsequent farmouts to Edison International and Noble Energy.

"FOGL is in the enviable position of having a very strong balance sheet, leading industry partners and the potential to realise value across our large acreage position in the Falkland Islands," he said.

"Following the period end, we have entered into a very exciting phase for the business and our partners, commencing with the spudding of our high impact Loligo exploration well."