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Rockhopper Exp plc (RKH)

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Tuesday 15 September, 2020

Rockhopper Exp plc

Half-year Report

RNS Number : 9603Y
Rockhopper Exploration plc
15 September 2020
 

15 September 2020 

 

Rockhopper Exploration plc

("Rockhopper", the "Group" or the "Company")

 

Half-year results for the six months to 30 June 2020

 

Rockhopper Exploration plc (AIM: RKH), the oil and gas exploration and production company with key interests in the North Falkland Basin, is pleased to announce its results for the six months ended 30 June 2020.

 

Year to date highlights

 

Operational

· Detailed transaction terms agreed with Navitas Petroleum LP ("Navitas") to farm-in for a 30 per cent interest in the Sea Lion project

· Under the farm-in terms, Rockhopper's costs for the Phase 1 development (not met by external debt) are to be funded by Premier and Navitas from 1 January 2020 to Phase 1 Project Completion (estimated to occur 9-12 months after first oil)*

· In response to recent external events, cost reduction process initiated to scale-back headcount and activity at Sea Lion pending an improvement in the external macro environment

· A core team continues to progress a number of project, commercial and regulatory workstreams including development of Sea Lion's net zero emissions plan

 

Corporate and financial

· Disposal of Rockhopper Egypt Pty Limited completed in February 2020

· Proceeds of US$4.0 million realised from the sale of the Group's entire shareholding in United Oil & Gas plc in August 2020

· Initiatives implemented to further materially reduce corporate G&A costs - US$2.7 million (H1 2020): a further 30% cost reduction target has been set

· US$222.2 million one-off non-cash impairment, based on a decision, in line with the operator, to write off the historic exploration costs associated with the resources which will not be developed as part of the Sea Lion Phase 1 project

· Cash resources of US$13.4 million as at 1 September 2020 - Board expects the Company to be fully funded through to at least the end of 2022, assuming Sea Lion sanction occurs during that time

 

Outlook

· Completion of the Navitas farm-in - targeted late Q4 2020

· Outcome awaited in relation to Ombrina Mare arbitration - seeking significant monetary damages

 

Keith Lough, Chairman of Rockhopper, commented: 

 

" Notwithstanding the current market volatility, Sea Lion remains a world-class oil resource with the scale and potential to create huge value in the right oil price environment for Rockhopper and the Falklands as a whole.

 

The proposed farm-out to Navitas validates the highly attractive nature of the asset, enhances the prospects of securing the requisite senior debt to allow sanction (once market conditions improve) and at the same time ensures that Rockhopper is fully funded for all Sea Lion development costs through to project completion.

 

In these uncertain macroeconomic times, the Board has focused on those areas within our control. Recent initiatives by the Group include the disposal of our Egyptian business and the proposed Sea Lion farm-out to Navitas. These initiatives taken together have raised significant cash proceeds thereby strengthening the Group's balance sheet, materially reducing our exposure to future costs at Sea Lion and at the same time introducing a third party into the Sea Lion project to enhance the prospects of securing funding for the project. As a result, the Group expects to be fully funded through to at least the end of 2022, assuming Sea Lion sanction during that time."

 

* Excluding licence fees, taxes and project wind down costs

 

In addition, the Company announces that it is changing its registered office address to Warner House, 123 Castle Street, Salisbury, SP1 3UA, effective immediately.

 

Enquiries:

 

Rockhopper Exploration plc

Sam Moody - Chief Executive

Stewart MacDonald - Chief Financial Officer

Tel. +44 (0) 20 7390 0234 (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)

Richard Crichton

Tel. +44 (0) 20 7418 8900

 

Vigo Communications

Patrick d'Ancona/Ben Simons

Tel. +44 (0) 20 7390 0234

 

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 and member of the Council of the Geological Society of London, 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").

 

 

 

 

CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S REPORT

 

The first half of the year saw unprecedented oil price weakness and volatility, driven by the combination of fears over the spread of COVID-19 and the impact this will have on the global balance of oil supply and demand. Oil prices have since recovered to around US$40/bbl, supported by the relaxation of restrictions related to COVID-19 as well as record supply cuts by OPEC and other producers. The outlook however remains uncertain with any near-term improvement in oil prices dependant on a number of factors including the containment of the pandemic.

 

In these uncertain macroeconomic times, the Board has focused on those areas within our control. Recent initiatives by the Group include the disposal of our Egyptian business and the proposed Sea Lion farm-out to Navitas. These initiatives taken together have raised significant cash proceeds thereby strengthening the Group's balance sheet, materially reducing our exposure to future costs at Sea Lion and at the same time, introducing a third party into the Sea Lion project to enhance the prospects of securing funding for the project. As a result, the Group expects to be fully funded through to at least the end of 2022, assuming Sea Lion sanction during that time.

 

Sea Lion Phase 1 development - project validated and de-risked through introduction of Navitas as joint venture partner

 

The overall strategy to develop the North Falkland Basin remains a phased development solution, starting with Sea Lion Phase 1, which will commercialise, through a conventional FPSO development scheme, 250 mmbbls (gross) of oil resources in the northern part of PL032 (in which Rockhopper has a 30% working interest post farm-out to Navitas). A subsequent Phase 2 development will commercialise the remaining approximately 280 mmbbls (gross) resources in both PL032 and the satellite accumulations in the north of PL004 (in which Rockhopper has a 30% working interest post farm-out to Navitas). In addition, there is a further 200 mmbbls (gross) of low risk, near field exploration potential which could be included in either the Phase 1 or Phase 2 developments. Phase 3 will entail the development of the Isobel/Elaine fan complex in the south of PL004, subject to further appraisal drilling.

 

The Company was delighted to announce the signing of a Heads of Terms with Navitas Petroleum LP ("Navitas") in January 2020 as the Board believes the introduction of Navitas into the Sea Lion joint venture validates the attractive nature of the asset, enhances the prospects of securing the requisite senior debt to allow sanction (once oil prices and capital markets recover) and, at the same time, through the revised commercial arrangements ensures that Rockhopper is fully funded for all Sea Lion development costs (excluding licence fees, taxes and project wind down costs) from 1 January 2020 to project completion (estimated 9 - 12 months after first oil).

 

Good progress has been made during the first half of 2020 to convert the Heads of Terms into fully documented agreements. Despite the continuing oil price weakness, all parties remain committed to the finalisation of the Navitas farm-out agreement. Discussions with the Falkland Islands Government ("FIG") regarding Navitas's entry into the project are progressing with completion of the transaction, which remains subject to FIG approval, targeted for late Q4 2020.

 

In response to recent external events, a cost reduction process was initiated to scale-back headcount and activity at Sea Lion pending an improvement in the external macro environment . As a result, a core team continues to progress a number of project, commercial and regulatory workstreams including the important development of Sea Lion's net zero emissions plan. Technical definition of the project is largely complete and all work fully documented to enable a swift reactivation of the project once the macroeconomic outlook improves and Premier's credit position better supports the funding of the project.

 

Corporate matters

 

Rockhopper commenced international arbitration proceedings against the  Republic of Italy in relation to the Ombrina Mare field in March 2017. The hearing took place in early February 2019 in Paris. In June 2019, the Tribunal rejected Italy's request for the suspension of the arbitration and Italy's related intra-EU jurisdictional objections.

 

Post-hearing briefings were submitted in October and November 2019. Feedback from the Tribunal has indicated that work continues on the award although the process has been delayed due to disruptions caused by COVID-19. No guidance on the timing of the award was provided by the Tribunal.

 

Rockhopper continues to believe 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 funded on a non-recourse ("no win - no fee") basis from a specialist arbitration funder.

 

The Group continues to actively manage its corporate costs and has reduced G&A by circa 50% over the last five years. In these particularly difficult times, a further review of corporate overheads has been undertaken with additional cost savings of circa 30% of G&A targeted. These measures include, but are not limited to: permanent reduction to executive director base remuneration; employee headcount reductions including certain roles transitioning to part-time; reductions to adviser and contractor costs; and a decrease in head office costs through the relocation to premises outside of London.

 

The disposal of our Egyptian business, including the subsequent sale of our shareholding in United Oil & Gas, generated a healthy return on investment with sale proceeds of US$15.5 million and free cash flow during our period of ownership of circa US$4.0 million, against an original investment of US$11.9 million in 2016.

 

Environmental, Social and Governance ("ESG")

 

ESG continues to be a key focus for Rockhopper and we are committed to acting as a socially responsible contributor to the global energy mix.

 

For the Sea Lion development, Rockhopper (in line with the operator) is committed to net zero in respect of scope 1 and 2 emissions from the project. Such a commitment is expected to be achieved through a combination of reduced emissions from the use of best-in-class technologies and investment in carbon-offsetting projects both in the Falklands and the UK.

 

In  June 2019, FIG approved the establishment of an environment fund to receive and administer future off-setting payments from the Sea Lion joint venture and distribute those funds for activities aimed at ensuring a positive environmental legacy.

 

Outlook

 

Notwithstanding the current market volatility, Sea Lion remains a world-class oil resource with the scale and potential to create huge value in the right oil price environment for Rockhopper and the Falklands as a whole.

 

The proposed farm-out to Navitas validates the highly attractive nature of the asset, enhances the prospects of securing the requisite senior debt to allow sanction (once market conditions improve) and at the same time, through the revised commercial arrangements, ensures that Rockhopper is fully funded for all Sea Lion development costs (excluding licence fees, taxes and project wind down costs) from 1 January 2020 to project completion (estimated 9 - 12 months after first oil).

 

With a supportive interim ruling on jurisdiction, we remain positive on the prospects of recovering significant monetary damages through our international arbitration against the Republic of Italy in respect of Ombrina Mare.

 

The Company is focussed on making every effort to unlock the Sea Lion development in order to create shareholder value. Should other opportunities, which are value accretive, and which will strengthen the Company and enhance the likelihood of the Sea Lion development reaching a positive sanction decision, be identified then these will be considered by the Board on an individual basis.

 

Keith Lough

Samuel Moody

Non-Executive Chairman

Chief Executive Officer

 

 

 

 

FINANCIAL REVIEW

 

OVERVIEW

 

From a financial perspective, the most significant events in the period include:

· Terms agreed with Navitas to farm-in for a 30 per cent interest in the Sea Lion project (signed January 2020)

· Disposal of Rockhopper Egypt Pty Limited to United Oil & Gas plc ("United") - completed in February - and subsequent sale of the Group's entire shareholding in United - completed in August 2020

· In response to the COVID-19 pandemic, and the dramatic fall in oil and gas prices, significant cost reduction programmes implemented both at the Sea Lion project level and corporately at Rockhopper

 

Following the divestment of the Group's entire shareholding in United, the Group has cash resources of US$13.4 million as at 1 September 2020.

 

The revised funding arrangements ensure that Rockhopper is funded for all pre-sanction costs related to Sea Lion (other than licence fees, taxes and project wind down costs). As such, the Group believes the above events materially strengthen the Group's financial position in the short and medium term and significantly enhance the prospects for a successful project financing for the Sea Lion project once markets recover.

 

Results summary

 

US$m (unless otherwise specified)

H1 2020

H1 2019

Working interest production (kboepd)

0.5

1.2

Realised oil price (US$/bbl)

56.5

63.1

Revenue

2.5

4.8

Cash operating costs

1.3

2.2

Recurring administrative costs ("G&A")*

2.4

2.4

Loss after tax

(226.8)

(16.5)

Cash out flow from operating activities

(1.0)

(2.8)

Capital expenditure

0.5

15.2

Cash, term deposits and liquid investments

18.2

26.9

* H1 2020 administrative costs of US$2.7 million include US$0.3 million of one-off costs associated with the corporate cost reduction exercise commenced in May 2020

 

Results for the period

 

For the period ended 30 June 2020, the Group reported revenues of US$2.5 million and loss after tax of US$226.8 million. The loss after tax primarily arose as a result of non-recurring non-cash impairments associated with previously incurred exploration costs in the North Falkland Basin. The decision was made, in line with the operator, to write off historic exploration costs associated with the resources which will not be developed as part of the Sea Lion Phase 1 project.

 

REVENUE

The Group's revenues of US$2.5 million (H1 2019: US$4.8 million) during the period relate entirely to the sale of oil and natural gas in the Greater Mediterranean (Egypt and Italy) region. The reduction in revenues from the comparable period reflects the completion of the disposal of the Group's Egypt portfolio in February 2020 as well as a decline in production and gas prices in Italy.

 

Working interest production averaged approximately 470 boepd during H1 2020, a reduction over the comparable period (H1 2019: 1,190 boepd), again related to the disposal of the Group's Egyptian portfolio during the period.

 

During the period, the Group's gas production in Italy was sold under short-term contract with an average realised price of €0.09 per scm (H1 2019: €0.19 per scm), equivalent to US$2.8 per mscf. Gas was sold at a price linked to the Italian "PSV" (Virtual Exchange Point) gas marker price.

 

In Egypt, all of the Group's oil and gas production was sold to Egypt General Petroleum Company ("EGPC"). The average realised price for oil was US$56.5 per barrel (H1 2019: US$63.1 per barrel), a small discount to the average Brent price over the same period. Gas was sold at a fixed price of US$2.65 per mmbtu.

 

OPERATING COSTS

 

Cash operating costs, excluding depreciation and impairment charges, amounted to US$1.3 million (H1 2019: US$2.2 million). Again the reduction in operating costs reflect the disposal of the Group's Egypt portfolio during the period.

 

The Group continues to manage corporate costs, having achieved an approximate 50% reduction in general and administrative ("G&A") cost, excluding non-recurring expenses related to restructuring and acquisitions, over the last five years. In light of the sharp reduction in oil prices experienced in Q1 2020, initiatives to further reduce corporate costs commenced in May 2020 with a target to reduce costs by a further 30%. As a result of initial one-off costs associated with these cost reductions (US$0.3 million), G&A costs increased to US$2.7 million in H1 2020. Excluding such one-off costs, recurring G&A remained flat compared with the corresponding period last year (H1 2019: US$2.4 million).

 

Following the decision in February 2016 by the Italian Ministry of Economic Development not to award the Group a Production Concession covering the Ombrina Mare field, in March 2017 the Group commenced international arbitration proceedings against the Republic of Italy. All costs associated with the arbitration are funded on a non-recourse ("no win - no fee") basis from a specialist arbitration funder.

 

CASH MOVEMENTS AND CAPITAL EXPENDITURE

 

At 30 June 2020, the Group had cash and term deposits of US$14.5 million (31 December 2019: US$17.2 million).

 

Cash and term deposit movements during the period:


US$m

Opening cash balance (31 December 2019)

17.2

Revenues

2.5

Cost of sales

(1.3)

Falkland Islands

(9.4)

Greater Mediterranean

(0.7)

Egypt disposal proceeds

11.5

Admin and miscellaneous

(5.3)

Closing cash balance (30 June 2020)

14.5

 

 

Following signature of a Heads of Terms in January 2020, Rockhopper's share of pre-sanction costs from 1 January 2020 (other than licence fees, taxes and project wind down costs) are funded by Premier and/or Navitas. During the first half of 2020, the Group paid US$8.7 million of Sea Lion costs related to the period prior to 1 January 2020. Further such costs, amounting to approximately US$4.6 million were paid during July/August 2020. Going forward, limited further costs are expected.

 

Spend in the Greater Mediterranean largely relates to the Egyptian portfolio prior to its disposal.

 

Admin and miscellaneous includes G&A, foreign exchange and movements in working capital during the period.

 

Following the sale of the Group's entire shareholding in United, the Group has cash resources of US$13.4 million as at 1 September 2020.

 

Impairment of oil and gas assets

 

Rockhopper has tested the carrying value of its assets for impairment. Carrying values are compared to the value in use of the assets based on discounted cash flow models. Future cash flows were estimated using a long-term Brent oil price assumption of US$62.5/bbl (in "real" terms) (2019: US$70/bbl real). A post-tax nominal discount rate of 10% and 12.5% was used for the Group's Greater Mediterranean and Falkland Islands assets respectively. 

 

Despite the reduction in the long-term oil price assumption, no impairment arose on the Sea Lion Phase 1 project. A range of sensitivities have been considered as part of the impairment testing process. In the event of a  US$2.5/bbl reduction in the Group's long-term oil price assumption, no impairment on Sea Lion Phase 1 arises. Equally, no impairment would arise even if the Group assumed project sanction was delayed by a further two years.

 

A decision was made, in line with the operator, to write off historic exploration costs associated with the resources which will not be developed as part of the Sea Lion Phase 1 project. This impairment has no impact on the Group's long-term strategy for multiple phases of development in the North Falkland Basin but instead reflects the limited capital which will be invested outside of the Phase 1 project in the near-term. A reversal of the impairment is expected once the Phase 1 project has been sanctioned and investment resumes on the Phase 2 project.

 

Mergers, acquisitions and disposals

 

On 23 July 2019, Rockhopper announced the disposal of Rockhopper Egypt Pty Limited which holds a 22% working interest in the Abu Sennan concession to United.

 

The consideration payable to Rockhopper under the transaction comprised:

· cash of  US $11.5 million; and

· the issue of 114,503,817 Consideration Shares representing approximately 18.5% of United's enlarged ordinary share capital.

   

The transaction was subject to satisfaction of customary conditions precedent including United shareholder approval, completion of the readmission of United to trading on AIM and receipt of Egyptian government approvals.   The transaction completed on 28 February 2020.

 

In August 2020, the Group disposed of its entire shareholding in United, realising a further US$4.0 million of cash proceeds.

 

Taxation

 

On 8 April 2015, the Group agreed binding documentation ("Tax Settlement Deed") with the Falkland Islands Government in relation to the tax arising from the Group's farm-out to Premier.

 

The Tax Settlement Deed confirms the quantum and deferment of the outstanding tax liability and is made under Extra Statutory Concession 16.

 

As a result of the Tax Settlement Deed, the outstanding tax liability was confirmed at 64.4 million and is payable on the earlier of: (i) the first royalty payment date on Sea Lion; (ii) the date on which Rockhopper disposes of all or a substantial part of the Group's remaining licence interests in the North Falkland Basin; or (iii) a change of control of Rockhopper Exploration plc.  

 

During the first half of 2017, as a result of the Group receiving the full Exploration Carry from Premier during the 2015/16 drilling campaign, the Falkland Islands Commissioner of Taxation agreed to reduce the tax liability in line with the terms of the Tax Settlement Deed. As such, the tax liability has been revised downwards to 59.6 million. The outstanding tax liability is classified as non-current and is discounted to a period-end value of US$36.6 million.

 

Full details of the provisions and undertakings of the Tax Settlement Deed are disclosed in note 8 of these condensed consolidated interim financial statements and these include "creditor protection" provisions including undertakings not to declare dividends or make distributions while the tax liability remains outstanding (in whole or in part). 

 

Liquidity, counterparty risk and going concern

 

The Group monitors its cash position, cash forecasts and liquidity on a regular basis and takes a conservative approach to cash management, with surplus cash held on term deposits with a number of major financial institutions.

 

Following the completion of the disposal of Rockhopper Egypt Pty Limited, the Group has cash resources of US$13.4 million (as at 1 September 2020) and generates limited revenue and cash flow from the sale of oil or gas but continues to fund the Group's materially reduced G&A costs.

 

Historically, the Group's largest annual expenditure has related to pre-sanction costs associated with the Sea Lion development. However, following signature of a legally binding Heads of Terms in January 2020, Rockhopper's share of all Sea Lion pre-sanction costs from 1 January 2020 (other than licence fees, taxes and project wind down costs) are funded by Premier and/or Navitas.

 

Management's base case forecast (in line with that of the operator) assumes a final investment decision on the Sea Lion development during Q4 2021, subject to securing requisite financing, with the Group's costs funded by Premier and/or Navitas during this period.

 

Management has also considered a downside scenario in which the project does not achieve sanction which could be due to a number of factors including funding not being achieved, or Premier deciding to withdraw from the Sea Lion Development which could also ultimately result in relinquishment of the acreage. In this scenario the Sea Lion project would need to be wound down including the decommissioning of assets in the Falklands and the Group is liable for its share of these project wind down costs with no funding support from Premier and/or Navitas.

 

Under the base case forecast, the Group will have sufficient financial headroom to meet forecast cash requirements for the 12 months from the date of approval of these condensed consolidated interim financial statements. However, in the downside scenario, in the absence of any mitigating actions, the Group may have insufficient funds to meet its forecast cash requirements. Potential mitigating actions, some of which are outside the Group's control, could include collection of arbitration award proceeds, deferral of expenditure or raising additional equity.

 

Accordingly, after making enquiries and considering the risks described above, the Directors have assessed that the cash balance held provides the Group with adequate headroom over forecasted expenditure for the following 12 months - as a result, the Directors have adopted the going concern basis of accounting in preparing these condensed consolidated interim financial statements. Nonetheless, for the avoidance of doubt, in the downside scenario run and in the absence of potential mitigating actions, a material uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern. The condensed consolidated interim financial statements do not include any adjustments that may be necessary if the Group were not a going concern.

 

PRINCIPAL RISK AND UNCERTAINTIES

 

A detailed review of the potential risks and uncertainties which could impact the Group are outlined in the Strategic Report of the Group's 2019 Annual Report. The Group identified its principal risks at the end of 2019 as being:

 

· sustained low oil price;  

· joint venture partner alignment and funding issues, both of which could ultimately create a delay to the Sea Lion Final Investment Decision; and

· failure of the joint venture partners to secure the requisite funding to allow a Sea Lion Final Investment Decision.

 

During 2019, the environmental impact of oil and gas extraction (e.g. Climate Change) was added to the risk register, reflecting the increased focus on ESG issues which could have an adverse impact on investor and lender sentiment towards the Group and the Sea Lion project.

 

STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS

 

The Directors confirm that, to the best of their knowledge, the condensed consolidated interim financial statements have been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the European Union and the AIM Rules for Companies, and that the interim results include a fair review of the information required.

 

The Directors must not approve the non-statutory Group financial statements unless they are satisfied that the non-statutory Group financial statements give a true and fair view of the state of affairs of the Group and of the profit or loss of the Group for that period. In preparing the non-statutory financial statements, the Directors are responsible for:

 

• selecting suitable accounting policies and then applying them consistently;

• stating whether applicable IFRSs as adopted by the European Union have been followed, subject to any material departures disclosed and explained in the financial statements;

• making judgements and accounting estimates that are reasonable and prudent; and

• preparing the non-statutory financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

 

The Directors are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's transactions and disclose with reasonable accuracy at any time the financial position of the group.

 

 

Stewart MacDonald

Chief Financial Officer

 

 

 

 

CONDENSED CONSOLIDATED income statement

for the six months ended 30 June 2020



Six months

Six months

Year



Ended

Ended

ended



30 June

30 June

31 December



2020

2019

2019



Unaudited

Unaudited

Audited


Notes

$'000

$'000

$'000

Revenue

2

2,467

4,782

10,328

  Other cost of sales


(1,283)

(2,224)

(4,647)

  Depreciation and impairment of oil and gas assets


(2,598)

(2,595)

(5,738)

Total cost of sales


(3,881)

(4,819)

(10,385)

Gross loss


(1,414)

(37)

(57)


(223,635)

(1,085)

(1,974)

Impairment of goodwill


-

(10,057)

(10,057)

Administrative expenses


(2,651)

(2,414)

(5,942)

Charge for share based payments


(843)

(617)

(1,307)

Foreign exchange movement


2,632

156

(1,627)

Results from operating activities and other income


(225,911)

(14,054)

(20,964)

Finance income


36

415

624

Finance expense


(956)

(2,813)

(291)

Loss before tax


(226,831)

(16,452)

(20,631)

Tax

3

8

-

-

Loss for the period attributable to the equity shareholders of the parent company


(226,823)

(16,452)

(20,631)

Loss per share: cents





Basic

4

(49.81)

(3.62)

(4.54)

Diluted

4

(49.81)

(3.62)

(4.54)

 

CONDENSED CONSOLIDATED statement of comprehensive income

for the six months ended 30 June 2020



Six months

Six months

Year



Ended

Ended

Ended



30 June

30 June

31 December



2020

2019

2019



Unaudited

Unaudited

Audited


Notes

$'000

$'000

$'000

Loss for the period


(226,823)

(16,452)

(20,631)

Exchange differences on translation of foreign operations


(28)

(145)

70

TOTAL COMPREHENSIVE Loss FOR THE period


(226,851)

(16,597)

(20,561)



 

CONDENSED CONSOLIDATED balance sheet

as at 30 June 2020



As at

As at

As at



30 June

30 June

31 December



2020

2019

2019



Unaudited

Unaudited

Audited


Notes

$'000

$'000

$'000

NON CURRENT Assets





Exploration and evaluation assets

5

243,651

454,366

465,820

Property, plant and equipment

6

530

2,622

1,814

Right-of-use assets


1,086

1,069

1,255

Finance lease receivable


580

906

628

CURRENT Assets





Inventories


1,463

1,743

1,463

Other receivables


3,622

7,654

3,501

Finance lease receivable


76

199

146

Investments

7

3,608

-

-

Restricted cash


441

565

467

Term deposits


-

20,000

-

Cash and cash equivalents


14,545

6,851

17,223

Assets held for sale


-

17,295

17,925

Total assets


269,602

513,270

510,242

CURRENT Liabilities





Other payables


7,873

17,647

17,943

Lease liability


291

391

426

Liabilities directly associated with assets held for sale


-

743

2,000

NON-CURRENT Liabilities





Lease liability


1,597

1,805

1,735

Tax payable

8

36,644

40,304

39,167

Provisions


13,672

13,787

13,636

Deferred tax liability


39,213

39,222

39,221

Total liabilities


99,290

113,899

114,128

Equity





Share capital

9

7,218

7,209

7,212

Share premium

9

3,622

3,509

3,547

Share based remuneration

9

4,975

4,208

4,871

Owns shares held in trust

9

(3,342)

(3,370)

(3,371)

Merger reserve

9

74,332

74,332

74,332

Foreign currency translation reserve

9

(9,706)

(9,893)

(9,678)

Special reserve

9

433,766

456,680

433,766

Retained losses


(340,553)

(133,304)

(114,565)

Attributable to the equity shareholders of the company


170,312

399,371

396,114

Total liabilities and equity


269,602

513,270

510,242

 

These condensed consolidated interim financial statements were approved by the directors and authorised for issue on 14 September 2020 and are signed on their behalf by:

 

Stewart MacDonald

Chief Financial Officer

 

 

CONDENSED CONSOLIDATED statement of changes in equity

for the six months ended 30 June 2020





Own


Foreign








shares


Currency




For the six months ended

30 June 2020

Share

Share

Share based

 held

Merger

Translation

Special

Retained

Total

capital

premium

remuneration

in trust

Reserve

Reserve

reserve

losses

Equity

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

Balance at 31 December 2019

7,212

3,547

4,871

(3,371)

74,332

(9,678)

433,766

(114,565)

396,114

Total comprehensive expense for the period

-

-

-

-

-

(28)

-

(226,823)

(226,851)

Other transfers

-

-

(835)


-

-

-

835

-

Share based payments

-

-

843

-

-

-

-

-

843

Share issues in relation to SIP

6

75

96

29

-

-

-

-

206

Balance at 30 June 2020

7,218

3,622

4,975

(3,342)

74,332

(9,706)

433,766

(340,553)

170,312

 







Foreign








Shares


Currency




For the six months ended

30 June 2019

Share

Share

Share based

 held

Merger

Translation

Special

Retained

Total

capital

premium

remuneration

in trust

Reserve

Reserve

reserve

losses

Equity

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

Balance at 31 December 2018

7,205

3,422

5,103

(3,369)

74,332

(9,748)

456,680

(118,282)

415,343

Total comprehensive expense for the period

-

-

-

-

-

(145)

-

(16,452)

(16,597)

Transfers

-

-

(1,430)


-

-

-

1,430

-

Share based payments

-

-

617

-

-

-

-

-

617

Share issues in relation to SIP

4

87

(82)

(1)

-

-

-

-

8

Balance at 30 June 2019

7,209

3,509

4,208

(3,370)

74,332

(9,893)

456,680

(133,304)

399,371

 







Foreign








Shares


Currency




For the year ended

31 December 2019

Share

Share

Share based

 held

Merger

Translation

Special

Retained

Total

capital

premium

remuneration

in trust

Reserve

Reserve

reserve

losses

Equity

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

Balance at 31 December 2018

7,205

3,422

5,103

(3,369)

74,332

(9,748)

456,680

(118,282)

415,343

Total comprehensive income for the year

 

-

 

-

 

-

 

-

 

-

 

70

 

-

 

(20,631)

 

(20,561)

Share based payments

-

-

1,307

-

-

-

-

-

1,307

Share issues in relation to SIP

7

125

(105)

(2)

-

-

-

-

25

Other transfers

-

-

(1,434)

-

-

-

(22,914)

24,348

-

Balance at 31 December 2019

7,212

3,547

4,871

(3,371)

74,332

(9,678)

433,766

(114,565)

396,114

 

 

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2020

 



Six months

Six months

Year



Ended

Ended

Ended



30 June

30 June

31 December



2020

2019

2019








Unaudited

Unaudited

Audited


Notes

$'000

$'000

$'000

Cash flows from operating activities





Net loss before tax


(226,831)

(16,452)

(20,631)

Adjustments to reconcile net losses to cash:





Depreciation


1,013

1,913

4,544

Share based payment charge


843

617

1,307

Impairment of oil and gas assets

6

1,789

700

1,600

Impairment of exploration and evaluation assets

5

223,003

150

350

Impairment of goodwill


-

10,057

10,057

Finance expense


956

2,813

291

Finance income


(36)

(415)

(624)

Foreign exchange


(2,450)

(307)

1,221

Operating cash flows before movements in working capital


(1,713)

(924)

(1,885)

Changes in:





Inventories


67

23

214

Other receivables


1,319

(585)

3,259

Payables


(677)

(1,322)

(1,623)

Movement on other provisions


3

-

(189)

Cash utilised by operating activities


(1,001)

(2,808)

(224)

Cash Flows from investing activities





Capitalised expenditure on exploration and evaluation assets


(9,388)

(8,632)

(20,152)

Purchase of property, plant and equipment


(653)

(1,794)

(3,743)

Disposal of exploration and evaluation assets and property, plant and equipment


8,421

-

-

Cash transferred to assets held for sale


-

(633)

-

Interest


44

333

1,020

Investing cash flows before movements in capital balances


(1,576)

(10,726)

(22,875)

Changes in:





Restricted cash


-

3

101

Term deposits


-

10,000

30,000

Cash flow from investing activities


(1,576)

(723)

7,226

Cash flows from financing activities





Share incentive plan


12

13

25

Lease liability payments


(119)

-

(259)

Finance paid


(3)

(6)

(13)

Cash flow from financing activities


(110)

7

(247)

Currency translation differences relating to cash and cash equivalents


9

(51)

42

Net cash (outflow)/inflow


(2,687)

(3,524)

6,755

Cash and cash equivalents brought forward


17,223

10,426

10,426

Cash and cash equivalents carried forward


14,545

6,851

17,223

 

 

Notes to the condensed CONSOLIDATED group financial statements

for the six months ended 30 June 2019

 

1 Accounting policies

 

1.1 Group and its operations

Rockhopper Exploration plc ('the Company'), a public limited company quoted on AIM, incorporated and domiciled in the United Kingdom ('UK'), together with its subsidiaries (collectively, 'the Group') holds interests in the Falkland Islands and the Greater Mediterranean. From the date of the RNS announcing these results the Company's registered office address will be Warner House, 123 Castle Street, Salisbury, SP1 3UA.

 

1.2 Statement of compliance and basis of preparation

These condensed consolidated interim financial statements of the Group, as at and for the six months ended 30 June 2020, include the results of the Company and all subsidiaries over which the Company exercises control.

 

The condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard ("IAS") 34 Interim Financial Reporting as adopted by the European Union ("EU"). The accounting policies applied in the preparation of the condensed consolidated interim financial statements are consistent with the policies applied by the Group in the consolidated financial statements as at and for the year ended 31 December 2019 which were prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.   They do not include all information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Company and all its subsidiaries as at the year ended 31 December 2019.

 

The comparative figures for the year ended 31 December 2019 are not the Group's statutory accounts for that financial period. Those accounts have been reported on by the Group's auditor and delivered to the registrar of companies. The report of the auditor was: (i) unqualified and (ii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

 

The preparation of condensed consolidated interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

 

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2019.

 

The condensed consolidated interim financial statements were approved by the Board on 14 September 2020.

 

All values are rounded to the nearest thousand dollars ($'000) or thousand pounds (£'000), except when otherwise indicated.

 

1.3 Going concern

 

The Group monitors its cash position, cash forecasts and liquidity on a regular basis and takes a conservative approach to cash management, with surplus cash held on term deposits with a number of major financial institutions.

 

Following the completion of the disposal of Rockhopper Egypt Pty Limited, the Group has cash resources of US$13.4 million (as at 1 September 2020) and generates limited revenue and cash flow from the sale of oil or gas but continues to fund the Group's materially reduced G&A costs.

 

Historically, the Group's largest annual expenditure has related to pre-sanction costs associated with the Sea Lion development. However, following signature of a legally binding Heads of Terms in January 2020, Rockhopper's share of all Sea Lion pre-sanction costs from 1 January 2020 (other than licence fees, taxes and project wind down costs) are funded by Premier and/or Navitas.

 

Management's base case forecast (in line with  that of the Operator) assumes a final investment decision on the Sea Lion development during Q4 2021, subject to securing requisite financing, with the Group's costs funded by Premier and/or Navitas during this period.

 

Management has also considered a downside scenario in which the project does not achieve sanction which could be due to a number of factors including funding not being achieved, or Premier deciding to withdraw from the Sea Lion Development which could also ultimately result in relinquishment of the acreage. In this scenario the Sea Lion project would need to be wound down including the decommissioning of assets in the Falklands and the Group is liable for its share of these project wind down costs with no funding support from Premier and/or Navitas.

 

Under the base case forecast, the Group will have sufficient financial headroom to meet forecast cash requirements for the 12 months from the date of approval of these condensed consolidated interim financial statements. However, in the downside scenario, in the absence of any mitigating actions, the Group may have insufficient funds to meet its forecast cash requirements. Potential mitigating actions, some of which are outside the Group's control, could include collection of arbitration award proceeds, deferral of expenditure or raising additional equity.

 

Accordingly, after making enquiries and considering the risks described above, the Directors have assessed that the cash balance held provides the Group with adequate headroom over forecasted expenditure for the following 12 months - as a result, the Directors have adopted the going concern basis of accounting in preparing these condensed consolidated interim financial statements. Nonetheless, for the avoidance of doubt, in the downside scenario run and in the absence of potential mitigating actions, a material uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern. The condensed consolidated interim financial statements  do not include any adjustments that may be necessary if the Group were not a going concern.

 

1.4 Period end exchange rates

The period end rates of exchange actually used were:

 


30 June 2020

30 June 2019

31 December 2019

£ : US$

1.31

1.27

1.32

€ : US$

1.12

1.14

1.12

2 Revenue and segmental information

 

Six months ended 30 June 2020


Falkland

Greater




Islands

Mediterranean

Corporate

Total


$'000

$'000

$'000

$'000

Revenue

-

2,467

-

2,467

Cost of sales

-

(3,881)

-

(3,881)

Gross profit/(loss)

-

(1,414)

-

(1,414)

Exploration and evaluation expenses

(222,228)

(812)

(595)

(223,635)

Administrative expenses

-

(514)

(2,137)

(2,651)

Charge for share based payments

-

-

(843)

(843)

Foreign exchange movement

2,523

78

31

2,632

Results from operating activities and other income

(219,705)

(2,662)

(3,544)

(225,911)

Finance income

-

-

36

36

Finance expense

-

(30)

(926)

(956)

Loss before tax

(219,705)

(2,692)

(4,434)

(226,831)

Tax

-

8

-

8

Loss for period

(219,705)

(2,684)

(4,434)

(226,823)

Reporting segments assets

242,856

6,509

20,237

269,602

Reporting segments liabilities

(76,370)

(14,401)

(8,519)

(99,290)

 

Material additions to segment assets are disclosed separately in notes 5 and 6.

 

Six months ended 30 June 2019


Falkland

Greater




Islands

Mediterranean

Corporate

Total


$'000

$'000

$'000

$'000

Revenue

-

4,782

-

4,782

Cost of sales

-

(4,819)

-

(4,819)

Gross loss

-

(37)

-

(37)

Exploration and evaluation expenses

-

(303)

(782)

(1,085)

Impairment of goodwill

-

(10,057)

-

(10,057)

Administrative expenses

-

(671)

(1,743)

(2,414)

Charge for share based payments

-

-

(617)

(617)

Foreign exchange movement

338

5

(187)

156

Results from operating activities and other income

338

(11,063)

(3,329)

(14,054)

Finance income

-

4

411

415

Finance expense

(2,783)

(7)

(23)

(2,813)

Loss before tax

(2,445)

(11,066)

(2,941)

(16,452)

Tax

-

-

-

-

Loss for period

(2,445)

(11,066)

(2,941)

(16,452)

Reporting segments assets

453,195

30,007

30,068

513,270

Reporting segments liabilities

(79,440)

(16,281)

(18,178)

(113,899)

 

All of the Group's worldwide sales revenues of oil and gas $2,467 thousand (2019: 4,782 thousand) arose from contracts to customers. Total revenue relates to revenue from two customers (2019: two customers) each exceeding 10 per cent of the Group's consolidated revenue.

 

3 Taxation

 


Six months

Six months

Year


ended

ended

ended


30 June

30 June

31 December


2020

2019

2019


$'000

$'000

$'000

Current tax:




Overseas tax

-

-

-

Adjustment in respect of prior periods

8

-

-

Total current tax

8

-

-

Deferred tax:




Overseas tax

-

-

-

Total deferred tax

-

-

-

Tax on ordinary activities

8

-

-

 

 

 

4 Basic and diluted loss per share

 



Six months

Six months

Year

 



ended

ended

ended

 



30 June

30 June

31 December

 



2020

2019

2019

 



Number

Number

Number

 

Shares in issue brought forward


457,979,755

457,495,899

457,495,899

 

Shares issued





 

- Issued under the SIP


502,365

308,503

483,856

 

Shares in issue carried forward


458,482,120

457,804,402

457,979,755

 

Weighted average number of Ordinary Shares


455,405,626

454,574,168

454,659,998

 








$'000

$'000

$'000

Net loss after tax for purposes of basic and diluted earnings per share


 

(226,823)

 

(16,452)

 

(20,631)

Earnings per share - cents





Basic


(49.81)

(3.62)

(4.54)

Diluted


(49.81)

(3.62)

(4.54)

 

The weighted average number of Ordinary Shares takes into account those shares which are treated as own shares held in trust (see note 9). As the Group is reporting a loss in each period in accordance with IAS33 the share options are not considered dilutive because the exercise of the share options would have the effect of reducing the loss per share.

 

At the period end the Group had the following unexercised options and share appreciation rights in issue.

 

 



Six months

Six months

Year



ended

ended

ended



30 June

30 June

31 December



2020

2019

2019



Number

Number

Number

Long term incentive plan


18,032,536

14,243,094

21,516,536

Share appreciation rights


786,967

786,967

786,967

Share options


32,194,588

-

-

 

5 Intangible exploration and evaluation assets

 

During the period there have not been any material additions. The majority of the movement is due to the US$222.2 million one-off non-cash impairment, based on a decision, in line with the operator, to write off the historic exploration costs associated with the resources which will not be developed as part of the Sea Lion Phase 1 project. Total impairments were US$223.0 million. The balance carried forward is predominantly in relation to the Sea Lion project.

 

6 Property, plant and equipment

 

During the period there have not been any material additions. The movement in the period relate to the depreciation and impairment of producing assets in the Greater Mediterranean Region. Impairments of US$1.8 million mainly relate to writing down the Egyptian portfolio to value of consideration received.

 

7 Investments

Investments relate to the shareholding in United Oil & Gas Limited received as part consideration for the disposal of the Abu Sennan production assets. The entire shareholding was disposed of in August 2020 for US$4.0 million.

 

8 Tax payable



Six months ended

Six months ended

Year

ended



30 June

30 June

31 December



2020

2019

2019



$'000

$'000

$'000

Current tax payable


-

-

-

Non current tax payable


36,644

40,304

39,167



36,644

40,304

39,167

 

On the 8 April 2015, the Group agreed binding documentation ("Tax Settlement Deed") with the Falkland Island Government ("FIG") in relation to the tax arising from the Group's farm out to Premier Oil plc ("Premier").

 

The Tax Settlement Deed confirms the quantum and deferment of the outstanding tax liability and is made under Extra Statutory Concession 16. The Outstanding Tax Liability is intended to be binding and final except, subject to the satisfaction of the Falkland Islands' Commissioner of Taxation, Rockhopper shall be entitled to make an adjustment to the Outstanding Tax Liability if any part of the Development Carry from Premier becomes "irrecoverable".

 

The Outstanding Tax Liability is payable on the earlier of:

· First royalty payment date, which is expected to occur within six months of the date of first oil;

· The date on which Rockhopper disposes of all or a substantial part of the Company's remaining interest in the Licences, or otherwise realises value from the Licences;

· A change of control of Rockhopper Exploration plc.

 

As security the Group has provided fixed and floating security over all assets (with limited carve outs where this would conflict with applicable law or existing terms). While such security is in place, restrictions, subject to conventional carve outs, exist on granting further security. The Group also agreed to maintain a minimum 20% interest in licence PL032 and not to make dividends or distributions.

 

The outstanding tax liability is £59.6 million and is expected to be payable on the first royalty payment date on Sea Lion. Currently the first royalty payment date is anticipated to occur within six months of first oil production which itself is estimated to occur three and a half years after project sanction. As such the tax liability has been discounted at 15% to a US$ equivalent amount of US$36.6 million.

 

No deferred tax asset has been recognised in respect of temporary differences arising on losses carried forward, outstanding share options or depreciation in excess of capital allowances due to the uncertainty in the timing of profits and hence future utilisation.

 

9 Reserves

Set out below is a description of each of the reserves of the Group:

 

Share premium

Amount subscribed for share capital in excess of its nominal value.

Share based remuneration

The share based remuneration reserve captures the equity related element of the expenses recognised for the issue of options, comprising the cumulative charge to the income statement for IFRS2 charges for share based payments less amounts released to retained earnings upon the exercise of options.

Own shares held in trust

Shares held in trust represent the issue value of shares held on behalf of participants in the SIP by Capita IRG Trustees Limited, the trustee of the SIP as well as shares held by the Employee Benefit Trust which have been purchased to settle future exercises of options.

Merger reserve

The difference between the nominal value and fair value of shares issued on acquisition of subsidiaries.

Foreign currency translation reserve

Exchange differences arising on consolidating the assets and liabilities of the Group's subsidiaries are classified as equity and transferred to the Group's translation reserve.

Special reserve

The reserve is non distributable and was created following cancellation of the share premium account on 4 July 2013. It can be used to reduce the amount of losses incurred by the parent company or subject to settling all contingent and actual liabilities as at 4 July 2013 it can distributed or used to acquire the share capital of the Company. Should not all of the contingent and actual liabilities be settled, prior to distribution the parent company must either gain permission from the actual or contingent creditors for distribution or set aside in escrow an amount equal to the unsettled actual or contingent liability.

Retained losses

Cumulative net gains and losses recognised in the financial statements.

 

 

Independent review report to Rockhopper Exploration plc

 

Report on the condensed consolidated interim financial statements

Our conclusion

 

We have reviewed Rockhopper Exploration plc's condensed consolidated interim financial statements (the "interim financial statements") in the half-year results of Rockhopper Exploration plc for the 6 month period ended 30 June 2020. Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the AIM Rules for Companies.

 

Emphasis of matter

 

Without modifying our conclusion on the interim financial statements, we draw attention to Note 1.3 in the financial statements, which indicates that under the base case forecast, the Group will have sufficient financial headroom to meet forecast cash requirements for the 12 months from the date of approval of these consolidated financial statements. However, in the downside scenario, in the absence of any mitigating actions, the Group may have insufficient funds to meet its forecast cash requirements. Potential mitigating actions, some of which are outside the Group's control, could include collection of arbitration award proceeds, deferral of expenditure or raising additional equity. As stated in Note 1.3 these events or conditions, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

 

What we have reviewed

 

The interim financial statements comprise:

 

· the condensed consolidated balance sheet as at 30 June 2020;

· the condensed consolidated income statement and condensed consolidated statement of comprehensive income  for the period then ended;

· the condensed consolidated cash flow statement for the period then ended;

· the condensed consolidated statement of changes in equity for the period then ended; and

· the explanatory notes to the interim financial statements.

 

The interim financial statements included in the half-year results  have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the AIM Rules for Companies.

 

As disclosed in note 1.2 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

 

Responsibilities for the interim financial statements and the review

 

Our responsibilities and those of the directors

 

The half-year results , including the interim financial statements, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-year results  in accordance with the AIM Rules for Companies which require that the financial information must be presented and prepared in a form consistent with that which will be adopted in the company's annual financial statements.

 

Our responsibility is to express a conclusion on the interim financial statements in the half-year results  based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the AIM Rules for Companies and for no other purpose.  We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

 

What a review of interim financial statements involves

 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

 

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

We have read the other information contained in the half-year results and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

 

PricewaterhouseCoopers LLP

Chartered Accountants

London

15 September 2020

 

 

Glossary :

 

2C

best estimate of contingent resources

2P

proven plus probable reserves

3C

a high estimate category of contingent resources

AGM

Annual General Meeting

Best

a best estimate category of Prospective Resources also used as a generic term to describe a best, or mid estimate

Board

the Board of Directors of Rockhopper Exploration plc

boe

barrels of oil equivalent

boepd 

barrels of oil equivalent per day

Capex

capital expenditure

Company

Rockhopper Exploration plc

E&P

exploration and production

EGPC

Egyptian General Petroleum Company

EIS

Environmental Impact Statement

ERCE

ERC Equipoise Limited

Farm-down

to assign an interest in a licence to another party

FEED

Front End Engineering and Design

FDP

Field Development Plan

FID

Final Investment Decision

FIG

Falkland Islands Government

FOGL

Falkland Oil and Gas Limited

FPSO

Floating Production, Storage and Offtake vessel

G&A

General and administrative costs

Group

the Company and its subsidiaries

High

a high estimate category of Prospective Resources also used as a generic term to describe a high or optimistic estimate

IFRS

International Financial Reporting Standard

kboepd

thousand barrels of oil equivalent per day

Low

a low estimate category of Prospective Resources also used as a generic term to describe a low or conservative estimate

LOI

Letter of Intent

mmbbls

million barrels (of oil)

mmboe

million barrels of oil equivalent

MMstb

million stock barrels (of oil)

mscf

thousand standard cubic feet

net pay

the portion of reservoir containing hydrocarbons that through the placing of cut offs for certain properties such as porosity, water saturation and volume of shale determine the productive element of the reservoir

P&A

plug and abandon

Premier

Premier Oil plc

PSV

virtual exchange point

scm

standard cubic metre

STOIIP

stock-tank oil initially in place

SURF

Subsea, Umbilicals, Risers and Flowlines

tvdss

true vertical depth subsea

 

 

 

 

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