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>>Half‐year results for the six months to 30 June 2017

Half‐year results for the six months to 30 June 2017

2017-12-04T11:51:11+00:00 7 September 2017|

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 results for the six months ended 30 June 2017.

Highlights

Funding package for the Sea Lion development progressing; targeting project sanction during 2018

  • Discussions initiated with UK Export Finance, the UK’s export credit agency, in relation to a proposed US$800 million senior debt financing for the Sea Lion project
  • Discussions progressing with potential contractors to the project for the provision of US$400 million of financing; non-binding proposals received for a significant proportion of funds sought with further proposals expected in the coming weeks
  • Sea Lion Phase 1 estimated capex to first oil reduced from US$1.8 billion to US$1.5 billion and life of field costs down to US$35 per bbl

Building a material production base in the Greater Mediterranean to protect balance sheet strength and fund future growth

  • Material increase in production – net working interest production averaged 1.2 kboepd in H1 2017 (H1 2016: 0.6 kboepd), up 92% over H1 2016
  • H1 2017 revenue increased to US$5.1 million, up 74% over H1 2016
  • Cash operating costs in Greater Mediterranean reduced by 44% to US$8.7 per boe (H1 2016: US$15.5 per boe)
  • Continued focus on managing corporate costs – H1 2017 general and administrative costs (excluding acquisition related costs) reduced by 34% to US$2.5 million (H1 2016: US$3.8 million)
  • General and administrative costs covered by operating cash flows (excluding changes in working capital)
  • Sale of non-core interests in Italy – US$9.0 million of future decommissioning liabilities removed from balance sheet upon completion
  • Balance sheet strength maintained with cash resources at 30 June 2017 of US$62.5 million and no debt; US$337 million development carry from Premier for Sea Lion Phase 1
  • Initiated international arbitration against Republic of Italy to seek significant monetary damages in relation to Ombrina Mare
  • Multiple material new venture opportunities being progressed with a focus on adding production and cash flow

Sam Moody, Chief Executive, commented:

Good progress has been made on a range of commercial, fiscal, regulatory and financing matters associated with the Sea Lion project. The primary focus for the remainder of 2017 will be to further progress funding proposals with the aim of being in a position to sanction the project during 2018.

“In our Greater Mediterranean portfolio, we have benefitted from a material increase in production and revenue following the acquisition of a portfolio of interests in Egypt during the second half of 2016. The payment situation in Egypt has improved markedly with the Company having received approximately US$7.7 million gross year-to-date. As a result, for the first time in the Company’s history, operating cash flows (excluding changes in working capital) covered the Group’s corporate costs, a significant milestone as we continue to build a balanced portfolio and a full cycle E&P business.

“In that context, the Company continues to examine a number of new venture opportunities aimed at adding further production and enhancing cash flow. The continued challenging commodity price environment creates opportunities of which the Company is well placed to take advantage given its strong balance sheet.

For further information, please contact:

Rockhopper Exploration plc

Tel: (via Vigo Communications) – 020 7830 9700
Sam Moody – Chief Executive
Stewart MacDonald – Chief Financial Officer

Canaccord Genuity Limited (NOMAD and Joint Broker)

Tel: 020 7523 8000
Henry Fitzgerald-O’Connor

Peel Hunt LLP (Joint Broker)

Tel: 020 7418 8900
Richard Crichton

Vigo Communications

Tel: 020 7830 9700
Patrick d’Ancona
Ben Simons

Note regarding Rockhopper oil and gas disclosure

This announcement has been approved by Rockhopper’s geological staff which includes Lucy Williams (Geoscience Manager) who is a Chartered Geologist, a Fellow of the Geological Society of London and a Member of both 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.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 (“MAR”).

Download full press release (PDF, 349KB)