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 2017.
Funding package for the Sea Lion Phase 1 development progressing; working towards final investment decision by year end 2018
- Estimated capex to first oil reduced from US$1.8 billion to US$1.5 billion
- Life of field costs down to less than US$35 per barrel
- Letters of Intent signed with contractors for a range of services and vendor financing
- Discussions progressing with senior debt providers including commercial banks and export credit agencies
- Field Development Plan substantially agreed with the Falkland Islands Government
- Environmental Impact Statement public consultation process completed
Building a material production base in the Greater Mediterranean to maintain balance sheet strength and fund future growth
- Material increase in production – net working interest production averaged 1.2 kboepd in 2017 (2016: 0.8 kboepd)
- Revenue up 40% to US$10.4 million (2016: US$7.4 million)
- Cash operating costs of US$9.5 per boe – maintaining a low cost base
- Continued management of G&A costs – US$5.3 million – down over 50% in 3 years G&A costs covered by operating cash flows
- Sale of non-core interests in Italy – US$9.5 million of future decommissioning costs removed from balance sheet upon completion
- Initiated international arbitration against Republic of Italy to seek significant monetary damages in relation to Ombrina Mare
- Balance sheet strength maintained with cash resources of US$51 million at 31 December 2017 and no debt
- Progress Sea Lion towards final investment decision by year end 20181
- Four well drilling campaign in Egypt to commence in Q2 2018
- Ombrina Mare arbitration hearing date set for early February 2019
- Continued pursuit of new venture opportunities to add production and cash flow
1 Operator estimate
David McManus, Chairman of Rockhopper, commented:
“Significant progress has been made in 2017 to advance and execute the contracting strategy and financing plan for the Sea Lion Phase 1 development.
“In the Greater Mediterranean, the Company has successfully established a portfolio that provides a low-cost, short-cycle production base which has delivered record revenues and operating cash flows in 2017 and more than covered the Group’s substantially reduced G&A costs. On a highly selective basis, we continue to seek to further expand our Greater Mediterranean production base with the aim of generating additional free cash flow to invest in future exploration and value‐accretive growth opportunities both in the Falklands and elsewhere.
“As we advance through 2018, Rockhopper is highly focused on securing the funding required to be in a position to reach a final investment decision on the Sea Lion project by the end of the year and move into the development phase. With Brent oil prices currently above US$70 per barrel, combined with the cost efficiencies secured through FEED and engagement with the contractors, the economics for the project are highly attractive.”
Rockhopper Exploration plc
Sam Moody – Chief Executive
Stewart MacDonald – Chief Financial Officer
Tel. +44 (0) 20 7830 9704 (via Vigo Communications)
Canaccord Genuity Limited (NOMAD and Joint Broker)
Henry Fitzgerald-O’Connor/James Asensio
Tel. +44 (0) 20 7523 8000
Peel Hunt LLP (Joint Broker)
Tel. +44 (0) 20 7418 8900
Patrick d’Ancona/Ben Simons
Tel. +44 (0) 20 7830 9704
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.
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”).
View full press release: RKH Final results for the year ended 31 December 2017