Rockhopper has been transformed by last year's Sea Lion oil discovery in the North Falkland Basin. The company has since been busy drilling further wells to determine the size of the discovery and to prove that oil flows at a sufficient rate to be commercial. Management has concluded from such tests that Sea Lion is indeed commercial and can, therefore, be economically developed as the first oil field in the Falklands.
By end-2011, Rockhopper expects to have drilled 10 wells - that process has already yielded a second discovery, Casper - and carried out two flow tests. Results to date suggest that Sea Lion could hold 1.297bn barrels of oil in the mid-case estimate. Following completion of the final well, which is currently being drilled, an independent resource estimate will be published at around end-March 2012.
The company has been evaluating how best to develop Sea Lion which, recent engineering work suggests, could produce at a plateau rate of 80,000 to 90,000 barrels of oil a day. To fund additional drilling and to support the company through to a final investment decision on Sea Lion, Rockhopper raised £46.5m through a placing in October.
| ROCKHOPPER EXPLORATION (RKH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 240p | MARKET VALUE: | £682m | |
| TOUCH: | 240-241p | 12-MONTH HIGH: | 391p | LOW: 135p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 138¢* | NET CASH: | $108m** | |
| Half-year to 30 Sep | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | nil | -27.5 | -14.8 | nil |
| 2011 | nil | -32.5 | -12.6 | nil |
| % change | - | - | - | - |
*Includes intangible assets of $240m, or 93¢ a share **Excludes $10.6m of term deposits and restricted cash £1=$1.57 | ||||
