As Rockhopper Exploration (RKH) produces very few barrels of oil, there were no major surprises in the group's full-year financial results. However, investors should note the skewed year-end net cash position in the table below, which excludes the acquisition of Falkland Oil & Gas.
The logic for that deal was vindicated before the deal completed in January. In acquiring Falkland, Rockhopper more than doubled its working interest in the Isobel Deep field just as a re-drill of the Isobel 2 exploration well proved successful. The remainder of that licence is held by Premier Oil (PMO), with whom Rockhopper separately renegotiated terms over the FEED (front end engineering design) contracts to develop the Sea Lion discovery. That work has been awarded to Subsea 7 and Texas-based National Oilwell Varco, described as "world-class contractors" by Rockhopper's outgoing chairman Pierre Jungels.
The period brought other drilling successes. The Zebedee well, immediately south of Sea Lion, added at least 60m barrels of recoverable oil, while Mediterranean production exceeded 700 barrels of oil equivalent per day by the end of 2015 and should boost revenue in 2016. Still, analysts at Liberum are forecasting an adjusted loss per share of 14¢ in 2016, against a loss of 8¢ last year.
ROCKHOPPER EXPLORATION (RKH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 30.3p | MARKET VALUE: | £138m | |
| TOUCH: | 30-30.5p | 12-MONTH HIGH: | 83p | LOW: 24p |
| DIVIDEND YIELD: | nil | PE RATIO: | 12 | |
| NET ASSET VALUE: | 57¢ | NET CASH: | $110m^ | |
| Year to 31 Mar | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2013 | nil | -75.0 | -15.8 | nil |
| 2014 | nil | -15.7 | -27.5 | nil |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2014* | 1.9 | -7.6 | -2.6 | nil |
| 2015 | 4.0 | -45 | 3.7 | nil |
| % change | +108 | - | - | - |
£1=$1.42. ^Includes term deposits. *Nine-month period to 31 Dec. | ||||
