In the past 12 months, Rockhopper has achieved positive results on its first two appraisal wells; one of which displayed commercially viable flow rates, according to management. Drilling is due to commence shortly at the next well in the programme, located to the west of the discovery, which, if successful, promises to increase Rockhopper's low-end recoverable estimate of 155m barrels of oil. The Aim-traded explorer's understanding of the geology of the Sea Lion field will also be enhanced by imminent interpretation of the data from its recently acquired 3D seismic programme.
Rockhopper has already undertaken measures to assess the various engineering and logistical challenges it will encounter when commercialising the Sea Lion field, which, along with the aforementioned appraisal programme, will form the basis of the field development plan that will be submitted to the Falkland Islands government by April 2013.
|ROCKHOPPER EXPLORATION (RKH)|
|ORD PRICE:||264p||MARKET VALUE:||£682m|
|TOUCH:||264-265p||12-MONTH HIGH:||549p||LOW: 202p|
|DIVIDEND YIELD:||nil||PE RATIO:||na|
|NET ASSET VALUE:||150¢||NET DEBT:||$269m|
|Year to 31 Mar||Turnover ($m)||Pre-tax profit ($m)||Earnings per share (¢)||Dividend per share (p)|
While Rockhopper has sufficient cash to complete the appraisal programme, the move towards full commercialisation will necessitate further fund-raising. Nevertheless, these latest returns indicate that the Sea Lion prospect is moving steadily towards fruition. Good value.