Completion of farm-out agreement with Premier Oil

RNS Number : 0515P

Rockhopper Exploration plc

19 October 2012

 

Embargoed: 0700hrs, 19 October 2012

Rockhopper Exploration plc

("Rockhopper" or the "Company")

Completion of farm-out agreement with Premier Oil plc

Rockhopper, the North Falkland Basin oil and gas exploration company, is pleased to announce the completion of the farm-out agreement with Premier Oil plc ("Premier").

Completion of the farm-out is a significant milestone for Rockhopper. The development carry and optional standby financing provided by Premier position Rockhopper as fully funded for its share of the Sea Lion development through to first oil and beyond.

Upon receipt of the upfront cash payment of $231 million from Premier, Rockhopper will have net cash available of approximately $270 million.

Rockhopper and Premier have been working closely together since the farm-out was announced in July and look forward to continuing that close relationship to deliver further success on Sea Lion and the wider opportunities.

Rockhopper can confirm that, whilst considerable work remains, the companies are aligned on timing and cost to achieve first oil in Q3 2017. Detailed concept selection is expected by the end of Q2 2013 when Rockhopper expects to provide a fuller development update.

Rockhopper is working closely with Premier in order to refine the exploration potential of the licences and high-grade exploration prospects for drilling in the wider Falklands area. Discussions regarding well selection and a 2014 drilling campaign are advancing well.

In addition, the Company is investigating a new ventures strategy based around accessing exploration-focused opportunities outside of the Falklands area which harness Rockhopper's proven exploration capabilities and expertise.

Sam Moody, Chief Executive of Rockhopper, commented:

"With the completion of this transformational deal, Rockhopper is now fully funded to first oil from Sea Lion in 2017 and for a three well exploration programme targeted for 2014.

Good progress has been made with Premier on advancing both the Sea Lion project itself and on high-grading the wider prospectivity in the region.

We are also looking forward to executing a focused new ventures effort outside the Falklands which plays to our strengths as a frontier explorer."

Simon Lockett, Chief Executive of Premier, commented:

"We are delighted to complete this agreement with Rockhopper.  As operator, we will progress Sea Lion to final development sanction and work closely with the Rockhopper team to mature the exciting exploration opportunities in our shared acreage."

Enquiries:

Rockhopper Exploration plc	Tel. [phone]
Sam Moody - Chief Executive Peter Dixon-Clarke - Finance Director	(via M: Communications)
Canaccord Genuity (Nomad and Joint Broker)	[phone]
Henry Fitzgerald-O'Connor / Rob Collins
Bank of America Merrill Lynch (Joint Broker and Financial Adviser)	[phone]
Julian Mylchreest / Paul Wheeler / Paul Frankfurt
Rothschild (Financial Adviser)	+ 44 (0)20 7280 5000
Neeve Billis / Stewart MacDonald
M: Communications	[phone]
Patrick d'Ancona / Ben Simons

Merrill Lynch International ("Bank of America Merrill Lynch"), a subsidiary of Bank of America Corporation, is acting exclusively for Rockhopper in connection with the Transaction and for no one else and will not be responsible to anyone other than Rockhopper for providing the protections afforded to its clients or for providing advice in relation to the Transaction.

N M Rothschild & Sons ("Rothschild"), is acting exclusively for Rockhopper in connection with the Transaction and for no one else and will not be responsible to anyone other than Rockhopper for providing the protections afforded to its clients or for providing advice in relation to the Transaction.

Notes to Editors:

Rockhopper was established in February 2004 with a strategy to invest in and carry out offshore oil exploration to the north of the Falkland Islands. The Company floated on AIM in August 2005 with four offshore production licences: PL023, PL024, PL032 and PL033 which cover approximately 3,800 sq. km. Rockhopper has further smaller interests in licences PL003, PL004a and PL004c, which are operated by Desire Petroleum plc. Additionally, the Company has a significant interest in licence PL004b which contains the extension to the Sea Lion Field as well as the Beverley, Casper and Casper South discoveries.

An extensive work programme was carried out over a number of years on the licences operated by Rockhopper. This has included 2D and 3D seismic and controlled source electromagnetic mapping. In February 2010, the Ocean Guardian drilling rig arrived in Falkland waters to carry out a multi-well drilling campaign. Rockhopper drilled an exploration well on Sea Lion during April and May 2010, the result of which was the first oil discovery and Contingent Resource in the North Falkland Basin. The Sea Lion discovery was successfully tested during September 2010 and June 2011 and was the first oil to flow to surface in Falkland Islands waters. Rockhopper's drilling campaign lasted from 16 April 2010 to 8 January 2012 and resulted in seven successful wells of the ten drilled, with three oil discoveries, three gas discoveries, multiple successful Sea Lion appraisal wells and a successful appraisal well on Casper.

In October 2012 Rockhopper completed a farm-out agreement with Premier Oil plc, whereby Premier Oil acquired 60 per cent. of Rockhopper's interests in its North Falkland Basin licences, with a view to achieving first oil production from Sea Lion in 2017.

Rockhopper Exploration plc www.rockhopperexploration.co.uk 

 

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