Falkland Oil and Gas said it will be able to drill its preferred exploration wells in Britain's remote Falkland Islands after raising 48.5 million pounds through a placing.

The company is one of several British firms looking for oil off the South Atlantic islands as part of a closely-watched campaign that is due to ramp up later in January when a rig arrives to explore waters south of the territory.

FOGL said on Friday the proceeds from the issue of new shares will be used to fund the drilling of a deeper first well targeting numerous reservoirs, as well as a second well, allowing it to overcome financial constraints which could have limited it to one well.

Discussions with potential new partners continue, said the company, adding that it undertook the placing as it does not expect to receive a suitable offer to help with financing within the drilling timetable.

The rig is slated to drill two wells for Borders & Southern when it arrives in ten days, FOGL said, forecasting a May start date for its first well.

The Falkland Islands is set to be transformed into an oil producing region after Rockhopper, a third British firm, made a discovery to the north of the islands in 2010.

The prospect of the British-governed province becoming an oil producer, however, is controversial, with Argentina claiming sovereignty to the islands that lie around 300 miles from its coast.

Shares in FOGL, which placed the new shares at 43 pence, closed at 50.5 pence on Thursday, valuing the firm at 104.7 million pounds. ($1 = 0.6528 British pounds)

(Reporting by Sarah Young; Editing by Matt Scuffham)