Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

Rockhopper Exploration ready to rock and roll in the Falklands as US$400mln funding talks near completion

Finally, the company and its partner Premier Oil appears to be gaining some traction for the Sea Lion field, host to an estimated 517mln barrels of oil
oil platform
Not quite at this stage yet, but the mood music is encouraging

Rockhopper Exploration PLC (LON:RKH) said it is close to kicking off the first phase of development of the Sea Lion Field in the northern waters of the Falkland Islands.

At the company's annual meeting later investors will hear that it and partner Premier Oil PLC (LON:PMO), which holds 60% of the offshore acreage, are close to selecting a main contractor to carry out the work.

Needed first is US$400mln of vendor funding with negotiations on this key part of the process "near completion". 

Comprehensive engagement with banks

"Following a comprehensive commercial bank market engagement process, with a number of banks expressing a desire to support the project, a pathfinder bank will be appointed imminently to assist with the arrangement of senior debt facilities for the project," chairman David McManus will tell the meeting.

His words echo those of Premier on Wednesday, which said it expects to appoint a pathfinder bank "shortly" to assist with the funding process.

Premier's financial distress, which saw it rack up huge debts related to the Catcher Field in the North Sea, has been the major drag on development of the asset, which was originally to have delivered first oil last year.  

Back from the abyss 

Premier, having battled back from the abyss, is now keen to exploit an asset that's host to an estimated 517mln barrels of crude.

With the Brent price now hovering around US$80 a barrel, after a years of sustained weakness, Sea Lion has never made more economic sense, analysts said.

Total costs are put at US$1.5bn, so the current round of financing is merely a start to the process.

Late last year, a report in the Financial Times suggested Premier is negotiating with the UK government to secure an export finance deal that would provide US$800mln of the total.

Greater Mediterrean also in focus

Rockhopper, meanwhile, owns assets in the greater Mediterranean area and is currently funding a four-well drilling campaign in Egypt, which should boost production.  

A hearing involving the Italian government regarding the Ombrina Mare Field, in the shallow waters of the Adriatic, is scheduled for February 2019 with the outcome expected by the middle of next year.

The company is seeking significant damages from the authorities following the Ministry of Economic Development's decision not to award the company a production concession.

Chairman McManus said: "Rockhopper believes it has strong prospects of recovering very significant monetary damages - on the basis of lost profits - as a result of the Republic of Italy's breaches of the Energy Charter Treaty. 

All costs associated with the arbitration are being met on a no-win-no-fee basis by a specialist arbitration funder.


View full RKH profile View Profile

Rockhopper Exploration Plc Timeline

Related Articles

oil barrels
April 26 2018
If the appraisal well is successful it could potentially be brought online as part of an early production scheme
oil and gas operations
April 09 2018
A 'high priority' exploration area is being advanced offshore Ireland, production growth is still on the cards onshore UK, and the company recently said it was looking at potential new opportunities.
Offshore oil rig
October 02 2018
Plexus' partner Gusar clinched a supply agreement with the Russian energy giant in September

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use