Rockhopper Exploration plc (AIM: RKH), the oil and gas company with key interests in the North Falkland Basin and the Greater Mediterranean region, is pleased to announce its audited results for the year ended 31 December 2016.
Building a material, full-cycle, exploration-led portfolio:
- Consolidated leading North Falkland Basin acreage position through the all-share merger with Falkland Oil & Gas Limited (“FOGL”)
- Acquired non-operated production and exploration assets in Egypt from Beach Energy
- Ambition to further grow the Greater Mediterranean asset base
Maintaining operational resilience based on compelling portfolio economics:
- Material increase in economic production1 to 1,350 barrels of oil equivalent per day (“boepd”)
- Cash operating costs in Greater Mediterranean reduced to US$14 per boe
- Sea Lion project economics enhanced with further cost reductions achieved
- Sea Lion life of field costs estimated at US$35 per barrel and project “break-even” at US$45 per barrel
Continued to progress the development of the large scale Sea Lion project:
- FEED contracts for the Sea Lion Phase 1 development awarded to a set of world-class contractors
- Independent resource audit confirmed 517 mmbbl (2C) and 900 mmbbl (3C) oil resources (gross), and near-field, low-risk exploration upside of 207 mmbbl (gross, mid case, unrisked)
- Updated draft Field Development Plan and draft Environmental Impact Statement submitted to Falkland Islands Government
Protecting financial strength to enable growth:
- Debt-free and fully funded for current commitments
- Strong balance sheet maintained with cash and term deposits of US$81 million (at 31 December 2016)
- General and Administrative costs expected to be largely covered by existing production going forward
- Initiated international arbitration to seek significant monetary damages in relation to Ombrina Mare
1 – Economic production includes production from the effective date (being 1 January 2016) of the acquisition of assets in Egypt
David McManus, Chairman of Rockhopper, commented:
“In 2016, Rockhopper delivered on a number of operational, corporate and strategic objectives: completing a highly successful exploration campaign in the Falklands, progressing the Company’s flag-ship Sea Lion development into FEED, whilst at the same time adding material incremental production in the Greater Mediterranean.
“As the technical engineering phase of the Sea Lion FEED approaches conclusion, focus will shift in 2017 to the commercial, fiscal and financing elements of the project.
“With the spot price for Brent crude fluctuating around $55 per barrel in early 2017, and the cost efficiencies realised through the FEED process, the Board is convinced the economics of the Sea Lion project are sufficiently robust to be sanctioned in the current environment, assuming the required capital investment can be secured.
“As a result of the acquisition of Beach Egypt, combined with corporate cost savings achieved through the year, operating cash flows are expected to broadly cover the Group’s overheads during 2017. The Board believes that this production and cash flow, when combined with our existing balance sheet, helps secure the long-term sustainability of the Company whilst preserving flexibility to further grow our Greater Mediterranean business in 2017.”
Download full press release: RKH Final results 110417 [1MB]
For further information, please contact:
Rockhopper Exploration plc
Tel: (via Vigo Communications) – 020 7830 9700
Sam Moody – Chief Executive
Fiona MacAulay – Chief Operating Officer
Stewart MacDonald – Chief Financial Officer
Canaccord Genuity Limited (NOMAD and Joint Broker)
Tel: 020 7523 8000
Tel: 020 7830 9700
Note regarding Rockhopper oil and gas disclosure
This announcement has been approved by Rockhopper’s geological staff who include Fiona MacAulay (Chief Operating Officer), who is a Fellow of the Geological Society of London and a Member of the Petroleum Exploration Society of Great Britain and American Association of Petroleum Geologists with over 25 years of experience in petroleum exploration and management, and who is the qualified person as defined in the Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in respect of AIM companies. In compiling its resource estimates, Rockhopper has used the definitions and guidelines as set forth in the 2007 Petroleum Resources Management System approved by the Society of Petroleum Engineers.