Rockhopper Exploration (RKH) served up positive updates on its Sea Lion discovery during the first half. But project timetable delays, and uncertainties over a tax liability with the Falklands Islands Government (FIG), has hit sentiment.
Indeed, the South Atlantic explorer revealed a full-year net loss of $75m (£48m) - reflecting a $122m tax bill levied on the cash receipts from its farm-out agreement with Premier Oil (PMO). Specifically, in October, Rockhopper sold 60 per cent of its stake in Sea Lion to Premier for a net $216m, along with $722m of development carry costs and $48m of exploration carry costs. Rockhopper estimates its capital gains tax liability on the farm-out at $78m, but the FIG thinks the sum is nearer $296m - discussions are ongoing.
Operationally, meanwhile, a competent persons report indicates contingent recoverable reserves at Sea Lion amounting to 337m barrels of oil - if a gas cap exists - increasing to 402m barrels without a gas cap. Rockhopper reckons there's a 50 per cent chance of a gas cap being present. But the timing of the project has slipped back six months - Rockhopper expects front-end engineering and design to commence in early 2014, with an investment decision planned for the end of next year.
That delay has meant that broker Canaccord Genuity's core valuation has slipped to 365p a share from 422p.
| ROCKHOPPER EXPLORATION (RKH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 119p | MARKET VALUE: | £339m | |
| TOUCH: | 119p-120p | 12-MONTH HIGH: | 191p | LOW: 112p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 117¢* | NET CASH: | $298m** | |
| Half-year to 31 March | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2009 | nil | -5.20 | -6.50 | nil |
| 2010 | nil | -7.70 | -6.60 | nil |
| 2011 | nil | -87.2 | -40.6 | nil |
| 2012 | nil | -53.8 | -19.9 | nil |
| 2013 | nil | 47.1 | -26.5 | nil |
| % change | - | - | - | - |
*Includes intangible assets of $152m, or 53¢ a share **Includes $80.7m of term deposits and restricted cash £1=$1.55 | ||||
