TIDMRKH
RNS Number : 5525V
Rockhopper Exploration plc
10 August 2015
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN OR INTO OR FROM ANY RESTRICTED JURISDICTION OR WHERE IT
WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF ANY SUCH
JURISDICTION
10 August 2015
Rockhopper Exploration plc
"Rockhopper" or the "Company"
Acquisition of non-operated production and exploration assets in
Egypt
Rockhopper Exploration plc (AIM: RKH), the oil and gas
exploration and production company with interests in the North
Falkland Basin and the Greater Mediterranean and North Africa
region, is pleased to announce the acquisition of a portfolio of
non-operated production and exploration interests in Egypt (the
"Interests") from Beach Energy Limited ("Beach Energy") (the
"Acquisition") for a headline consideration of US$22.0 million.
Highlights
-- Rockhopper to acquire the entire issued share capital of
Beach Petroleum (Egypt) Pty Limited ("Beach Egypt") which on
completion will hold:
o 22% interest in the Abu Sennan concession; and
o 25% interest in the El Qa'a Plain concession
-- Current working interest production from Abu Sennan of
approximately 1,300 boepd, net to Rockhopper (based on average H1
2015 production levels)
-- 2P plus 2C reserves and resources at the effective date of 1
July 2015 are estimated at 4.5 mmboe (management estimate), net to
Rockhopper
-- Headline consideration of US$22.0 million to be satisfied:
o Approximately US$11.5 million in cash; and
o The issue of new fully-paid Rockhopper shares to the value of
US$10.5 million, priced based on the volume weighted average price
of Rockhopper shares during the 30 days prior to completion,
subject to a maximum of 5% of the Company's issued share capital
(the "Rockhopper Consideration Shares")
-- Implied transaction multiple of less than US$4.50 per barrel
of oil equivalent (adjusting for estimated financial assets being
acquired)
-- Rockhopper retains balance sheet strength post acquisition -
forecast cash at end 2015 estimated at US$110 - 120 million
-- Transaction represents the continuation of Rockhopper's
strategy to build a full cycle E&P company focused on its two
core areas and represents the Company's entry into Egypt, a
prolific hydrocarbon province
-- Acquisition anticipated to complete in late 2015 / early 2016
(subject to satisfaction of certain conditions), with consideration
adjusted for net cash flow attributable to the assets since the
effective date of 1 July 2015
Abu Sennan concession
The Abu Sennan concession is located in the Abu Gharadig basin
in the Western Desert. The concession was signed in June 2007 with
first commercial production achieved during 2012 and cumulative oil
production to date of approximately 1.9 million barrels. The
concession remains underexplored with significant exploration and
appraisal upside providing opportunities for near-term production
additions. The concession partners are Kuwait Energy (50% and
operator) and Dover Investments (28%).
El Qa'a Plain concession
The El Qa'a Plain concession is located on the eastern shore of
the Gulf of Suez and contains a number of oil leads identified on
existing 2D seismic data. The concession was signed in January 2014
and the forward plan is to acquire 450 sq km of 3D seismic in 2015
followed by the drilling of one or more exploration wells in 2016.
The concession partners are Dana Petroleum (37.5% and operator) and
Petroceltic (37.5%).
Financial information
The headline consideration for the Acquisition is US$22.0
million payable to Beach Energy through a combination of cash and
the issue of the Rockhopper Consideration Shares. The cash element
will be funded from the Company's existing cash resources. The
precise number of Rockhopper Consideration Shares issued will be
based on the volume weighted average price of Rockhopper shares
during the 30 days prior to completion, subject to a maximum of
14.8 million new Rockhopper shares (adjustable for new shares
issued prior to completion), representing up to 5% of the Company's
issued share capital.
The actual sum payable at completion will be adjusted to take
into account net cash flow attributable to the Interests from the
effective date of 1 July 2015.
Unaudited revenue, EBITDA and profit after tax of $8.1 million,
$6.3 million and $0.3 million respectively are attributable to the
Interests in the 12 month period to 30 June 2015.
The Acquisition is expected to complete in late 2015 / early
2016 and is subject to the satisfaction of certain conditions
precedent including completion of limited confirmatory due
diligence, divestment by Beach Egypt of certain non-core assets,
standard joint venture consents including pre-emption and Egyptian
regulatory approvals.
Sam Moody, CEO, commented:
"This transaction represents another significant milestone as we
continue to build Rockhopper into a full cycle, exploration led,
E&P company focused on our two core areas of the North Falkland
Basin and the Greater Mediterranean and North Africa region.
"We expect this portfolio to be net cash flow positive
immediately and upon completion of the transaction expect operating
cash flows from Egypt and our existing Italian assets to cover
Group overheads going forward.
"Through the acquisition we have added 2P plus 2C reserves and
resources at a net acquisition price of less than $4.50 per boe
(after financial adjustments) whilst preserving our balance sheet
and limiting dilution to shareholders to less than 5%."
A presentation with further details of the transaction will be
made available on the Company's website.
For further information, please contact:
Rockhopper Exploration plc
Tel: (via Vigo Communications) - 020 7016 9571
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
Henry Fitzgerald-O'Connor
Liberum Capital (Joint Broker)
Tel: 020 3100 2227
Clayton Bush
Vigo Communications
Tel: 020 7016 9571
Peter Reilly
Patrick d'Ancona
Further information
This announcement is for information only and is not intended to
and does not constitute, or form part of any offer to sell or
invitation to purchase or subscribe for any securities, or any
solicitation of any vote or approval in any jurisdiction pursuant
to the Acquisition or otherwise. This announcement does not
constitute a prospectus or a prospectus equivalent document.
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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