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The main problem facing Rockhopper, and other Falklands oil explorers like Desire Petroleum and Falklands Oil & Gas, is the challenge of getting the necessary technical kit down to the South Atlantic. This is why the market has got excited - pushing Rockhopper shares up eight per cent - on news that the company has appointed SPD to provide drilling and well engineering services, and Thompson Knight Global Energy Services to assist the drilling farm-out campaign.
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The company has also appointed RPS Energy to undertake an environmental impact assessment and has commissioned CGG Veritas to reprocess 3-D seismic data over two licences, which will help evaluate geohazards over possible drilling locations. This reprocessing should take eight weeks, after which the company expects to be ready to drill two to four targets.
The whole Falklands project remains very risky, but imminent drilling should at least clarify the region's true potential. The possible upside is spectacular, but at 106p, much expectation has already been built into the valuation, leaving Rockhopper shares fairly priced.
See also: Rigging the Falklands oil race
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