ferret's stock to watch: global petroleum ltd

Ferret's Stock to Watch: GLOBAL PETROLEUM LIMITED
08:42, Thursday, 2 June 2005

AN OIL INVESTOR WITH A PROSPECTIVE GLOBAL PORTFOLIO

Sydney - Thursday - June 2: (RWE Australian Business News)
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OVERVIEW
********

Australian-listed oil exploration companies now have interests
around the globe and often pop up in the most unlikely places.

Global Petroleum Ltd (GBP) is a good example with a 16 per cent
stake in Falkland Oil and Gas Ltd after a fresh fund raising issue by
FOGL.

Global has a portfolio that should whet the appetites of real
speculative oil investors.

There is Kenya in Africa, Ireland and Malta as well Falkland in
the South Atlantic, along with a little each way on Queensland. Other
prospects collected property in Fiji, Montenegro and Iraq.

Falkland is an oil and gas exploration company operating in the
undrilled South and East Falkland Basins, potentially a new petroleum
province in the South Atlantic.

Global Petroleum revealed details of the Falkland Oil and Gas
capital raising to the Australian Stock Exchange on Tuesday.

Directors of Global say it will not participate in the placement
so as to conserve the company's cash position.

But Global's interest in FOGL will still give it 14 per cent of
FOGL after the issue of the new ordinary FOGL shares.

A statement to Global from Falkland said KBC Peel Hunt Ltd had
placed 11,764,706 ordinary shares at a price of 85p per share to raise
10 million pounds (about 9.7 million pounds after expenses).

The New Ordinary Shares have been placed with certain
institutional and other investors, including directors.

Falkland also announced it had entered into a further 2D seismic
contract with Geophysical Services Incorporated of Calgary to acquire a
minimum 8,000 km of 2D seismic with an option for the company to extend
the survey subject to agreement between FOGL and Hardman.

The program is scheduled to cover areas in both the 2002 and the
2004 licence areas and will concentrate on areas of interest identified
in the initial 9,450 km survey which has just been completed.

The new 2D seismic program will use the GSI Admiral boat and is
expected to commence this month.

Hardman Resources Ltd is also a party to the new 2D seismic
contract.

Directors of Falkland said the company was formed in May 2004 to
invest in an offshore oil exploration program in licence areas south and
east of the Falkland Island.

It was admitted to AIM in October 2004, raising 12 million
pounds in the process.

FOGL then held (and retains) a 77.5 per cent interest in
licences covering approximately 33,700 sq km. Hardman Resources Limited
holds the remaining 22.5 per cent interest in these licences.

In December 2004 the company was awarded a 100 per cent interest
in licences over an additional 50,000 sq kms adjacent to its existing
licence areas.

On May 3 FOGL announced the preliminary results of a 9,450 km 2D
seismic survey over most of its licence areas.

The survey has identified 130 leads, far in excess of the eight
leads identified at the time of the AIM IPO in 2004.

Given the positive results, FOGL announced that it planned to
significantly increase the scope of its exploration program.

The net funds raised, together with existing cash resources
which totalled about 11 million pounds at March 31, will enable the
company to fund its plans to conduct further seismic surveys targeting
all the leads but with particular emphasis on the 50 most promising.

The aim will be to develop about 20 high-quality, technically
sound and potentially economically viable drilling prospects.

This program is expected to include a minimum of 8,000 km and
possibly up to 15,000 km of 2D seismic survey, through the contract with
GSI referred to above, and possibly a 2,000 sq km 3D seismic survey.

The funds raised will be sufficient, in the opinion of the
directors and on the basis of current estimates, to fund this work and
cover the company's overheads through 2006.

The strengthened funding position should also improve the
company's position when negotiating with potential farm-in partners.

Application will be made to the London Stock Exchange for the
New Ordinary Shares to be admitted to trading on AIM.

Admission of the new ordinary shares is expected to become
effective on June 3.

The new ordinary shares will be issued credited as fully paid
and will rank equally in all respects with the existing ordinary shares,

This includes the right to receive all dividends and other
distributions declared or paid thereon following admission.

The placing is conditional upon the placing agreement between
KBC Peel Hunt Ltd and the company having become unconditional in all
respects.

John Armstrong, executive chairman of Global Petroleum, said the
results of the 2D seismic announced in May were very encouraging and far
exceeded the company's most optimistic estimates.

"It was clear from the large number of leads identified that the
amount of work needed to maximise the potential of our acreage had
increased significantly," he said.

"The proceeds of this placing will provide us with the necessary
funds to expand the scope of our planned exploration program and give us
the best possible chance of success."

SHARE PRICE MOVEMENTS
*********************

Shares of Global Petroleum yesterday drifted off 0.5c to 32.5c.
Rolling high for the year has been 90c and low 14.44c.

Falkland Oil and Gas preliminary unaudited results for the
period ended March 31 are freely available to Global shareholders.

FOGL is an oil and gas exploration company operating in the
undrilled South and East Falkland Basins, potentially a new petroleum
province in the South Atlantic.

Formed in May 2004, these are FOGL's maiden results following
its admission to AIM (an arm of the London Stock Exchange) in October
2004.

During the period FOGL extended its licence area by 50,000 sq km
through the awarding of a 100 per cent owned licence; completed a
9,450km 2D seismic survey, well in excess of the IPO plan; provided the
results of the survey which far exceeded expectations by identifying 130
leads.

It strengthened the management team with the appointment of a
second non-executive director and a full-time exploration manager

Further work is planned to define up to 20 drillable prospects
by mid-2006.

The current cash position is 11 million pounds, and the company
is debt free.

FOGL is evaluating its funding requirements and the source of
funds for the increased exploration program.

FOGL is targeting drilling of the first exploration well in
2007.

Mr Armstrong said "We have made remarkable progress since last
year's IPO.

"The results of the seismic survey are encouraging and have
upgraded the licences by providing direct evidence of the presence of
hydrocarbons.

"We are now planning a much enlarged exploration programme with
the aim of developing a multi-well drilling plan in 2006, with the
possibility of drilling the first exploration well in 2007."

He said that in this light, Global is evaluating its funding
requirements and the source of funds for the increased exploration
program.

This includes the option of including another party or parties
in the project across some or all of the licence acreage.

"This is the most exciting project I've been involved in for
some years and there is a real chance that the Falkland Islands will
become a new petroleum province," Mr Armstrong declared.

BACKGROUND
**********

Global Petroleum Ltd was listed on the Australian Stock Exchange
on June 24, 1994.

The company's core business philosophy is the responsible
investment of speculative funds in the petroleum sector.

Its strategy is to obtain early licence positions in frontier
exploration areas to provide maximum value leverage on exploration
success.

The company will continually investigate opportunities that will
grow the company by adding Australian and international projects to the
portfolio which fit the overall strategy of the company.

The company's key assets are:

* 20 per cent of Kenya Blocks L5, L7, L10 and L11;

* 16.06 per cent of Falkland Oil and Gas Limited - listed on
AIM;

* 10.1 per cent of Falkland Gold and Minerals Limited - listed
on AIM;

* 100 per cent of ATP728, Surat Basin, Queensland;

* 100 per cent of Blocks 57/3, 4, 8 and 9 - Ireland;

* 100 per cent of Blocks 4 and 5 of Area 3 - Malta;

* Iraq (20 per cent): GBP formed a JV in Nov 2003 with Fira
International to apply and undertake explorations in the Chamchamal
Area;

* Montenegro (51 per cent): Operations include Block 1 and Block
2 located in the Adriatic Sea;

* Fiji: Interest includes OELA 1/2002 located in the Baravi
Basin, OELA 2/2002 & OELA 3/2002 located in the Bligh Water Basin, OELA
5/2002 located in the Suva Basin and OELA 6/2002 & OELA 7/2002 located
in the Lau Ridge.

ENDS

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I don't hold GBP