Shares in Falkland Oil and Gas Ltd. (FOGL.LN) rose 1.14% early Monday after it confirmed it will drill a third well as part of its Falkland Islands drilling program.

FOGL, in partnership with logistics giant BHP Billiton (BHP), said it has secured the Ocean Guardian rig to drill the first ever well in the East Falklands Basin, expected by the end of May. FOGL estimates the Toroa prospect could hold up to 1.7 billion barrels of mean, risked recoverable oil.

The oil and gas exploration company said it made a wider pretax loss of $5.5 million for the year ended Dec. 31 compared with a loss of $1.3 million a year earlier. FOGL's cash balance stood at $93.5 million, enough to fund Toroa and its other prospects.

Logistics giant BHP Billiton PLC (BLT.LN), which has partnered with FOGL for the drilling programme, is also seeking a suitable rig to drill its prospects in the South Falklands Basin later in the year, FOGL said.

At 1007 GMT, shares in Falklands Oil and Gas were off highs but still up 1.1% at 154.94 pence.

-By Caroline Henshaw, Dow Jones Newswires; 4420-7842-9478; caroline.henshaw@dowjones.com

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