March 20, 2012 / 10:44 AM / 6 years ago

Falklands Oil Co shares jump on option deal

LONDON (Reuters) - Falklands Oil and Gas FOGL.L, the explorer focused on the disputed South Atlantic islands, said on Tuesday an unnamed group had bought an option to invest in the company’s licence areas, sending its shares more than 7 percent higher.

A British military Hercules plane flies over Goose Green, near Port Stanley March 16, 2012. Diplomatic tensions between Argentina and Britain have been rising in the run up to the 30th anniversary of the Falklands War fought over the islands. REUTERS/Marcos Brindicci

FOGL had been close to agreeing a deal with the option purchaser to buy into the Falklands acreage but for undisclosed “corporate reasons” the party backed out at the last moment.

FOGL Chief Executive Tim Bushell denied the decision was related to Argentina’s recent threats of legal action against companies operating in the Falklands. Britain fought a brief war against Argentina 30 years ago for control of the islands.

He added the option purchaser remained keen on the investment. The party has agreed to pay $6 million for an option to buy a 25 percent stake in the licences for $60 million.

Analysts at Jefferies and Mirabaud said this would represent a good price for FOGL.

FOGL shares traded up 7.8 percent at 65.75 pence at 0923 GMT, outperforming the STOXX Europe 600 Oil and Gas index .SXEP.

Reporting by Tom Bergin; Editing by Erica Billingham

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