25 September 2012

Falkland Oil and Gas Limited

("FOGL")

Scotia - FI 31/12-01 Well Spud

FOGL, the oil and gas exploration company focused on its extensive licence areas to the South and East of the Falkland Islands, is pleased to announce that the Scotia exploration well FI 31/12-01 was spudded on 25 September 2012.

The well is located 315 km east - northeast of Stanley, Falkland Islands and 114 km from the Loligo prospect.

FOGL is the operator of the well, holding a 75% interest, together with its partner Edison International Spa, which holds the remaining 25% interest. Under a farmout agreement announced on 6 August 2012, Noble Energy Inc. will also participate in this well for a 35% interest, thereby reducing FOGL's interest to 40%. The farmout agreement has been approved by the Falkland Islands Government and the changes to the licences will be formally executed in the near future. Scotia is the second of FOGL's two well exploration programme using the Leiv Eriksson semi submersible drilling rig.

The well is designed to test the Scotia prospect within the mid Cretaceous fan play. It is anticipated that the well operations will be around 75 days with a total depth of approximately 5,000 metres.

- Ends -

Enquiries:

Falkland Oil and Gas

+44 (0) 207 563 1260

Tim Bushell, Chief Executive

Oriel (Nominated Advisor and Joint Broker)

+44 (0) 207 710 7600

David Arch / Gareth Price / Ashton Clanfield

Jefferies Hoare Govett (Joint Broker)

+44 (0) 207 029 8000

Alex Grant / Chris Zeal / Graham Hertrich

FTI Consulting

+44 (0) 207 831 3113

Ben Brewerton / Ed Westropp

The technical information included in this announcement has been reviewed, verified and compiled by the Company's geological staff, including a qualified person, Colin More BSc., MSc. (Exploration Director), who has over 26 years of experience in petroleum exploration, for the purpose of the Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in respect of AIM companies, which outline standards of disclosure for mineral projects. Mr More is a member of the Geological Society of London, the American Association of Petroleum Geologists and the Society of Exploration Geophysicists.