TIDMRKH
RNS Number : 1707W
Rockhopper Exploration plc
07 February 2017
7 February 2017
Rockhopper Exploration plc
("Rockhopper" or the "Company")
Operational and Corporate Update
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 provide the following
operational and corporate update.
Sea Lion Phase 1, North Falkland Basin (RKH 40% working
interest)
The front end engineering and design (FEED) process continues to
make good progress with the technical engineering phase of FEED
approaching conclusion. During 2017, the focus will shift to the
commercial, fiscal and financing elements of the project.
Engagement with Falkland Islands Government (FIG) on a range of
operational, fiscal and regulatory matters is expected to continue
through H1 2017.
Rockhopper notes the recent announcement by Premier Oil in
relation to its proposed refinancing. Rockhopper believes the
completion of Premier's refinancing will significantly enhance the
discussions around the financing of the Sea Lion development.
Abu Sennan, Egypt (RKH 22% working interest)
The work programme and budget for the Abu Sennan Concession sees
the imminent drilling of both an exploration and a development well
close to the Al Jahraa and Al Jahraa SE fields (over which a new
development lease was awarded in Q4 2016) during the first half of
2017.
The exploration well, Al Jahraa-SE2, which is due to spud in
March 2017, will target the AR-C reservoir in the fault block
immediately to the south of the Al Jahraa SE field.
On completion of the exploration well, the rig will move
directly to Al Jahraa-9, which is a development well expected to
spud in May 2017. This development well targets the AR-C reservoir
at a location deeper than the current deepest oil penetration at Al
Jahraa-4 (no oil water contact has yet been encountered in the
field) thereby aiming to prove additional reserves. The well also
seeks to demonstrate the connection between the Al Jahraa and Al
Jahraa SE fields through the oil leg. In addition, the operator has
proposed two work-over operations during Q2 2017.
The outcome of operations in H1 2017 on the Abu Sennan
Concession will determine the activities during the second half of
the year.
In addition, the Company notes the recent announcement by Kuwait
Energy in relation to the farm-out of a 25% interest in the Abu
Sennan Concession. The Company has confirmed to Kuwait Energy that
it waives its right of pre-emption in relation to this transaction.
Whilst the details of Kuwait Energy's proposed farm-out are
confidential they nonetheless re-enforce the attractive terms on
which Rockhopper entered the Abu Sennan Concession last year.
Ocean Rig settlement
As set out in the Company's interim results announcement on 14
September 2016, the operators of the 2015/16 North Falkland Basin
exploration campaign entered into arbitration with Ocean Rig in
relation to the termination of Eirik Raude rig.
The Company can now confirm that a settlement has been reached
between the operators and Ocean Rig.
Year-end 2016 cash position and 2017 capital expenditure
guidance
As previously disclosed, Rockhopper's year-end 2016 cash balance
was approximately $80 million (unaudited). Adjusting the year-end
cash position for Rockhopper's contribution to anticipated North
Falkland Basin exploration campaign close out costs and the
settlement with Ocean Rig, keeps Rockhopper's adjusted year-end
cash balance in line with the Company's previous guidance of
$60-$65 million. In addition to the year-end cash position,
Rockhopper's Egyptian General Petroleum Corporation (EGPC)
receivable balance as at 31 December was approximately $4
million.
2017 development, exploration and abandonment spend is expected
to be approximately $13 million, of which $8 million relates to
pre-development activities on Sea Lion, $3 million to exploration
and development activities in Egypt and $2 million to abandonment
costs. The abandonment spend principally relates to the
decommissioning and removal of the Ombrina Mare tripod - the cost
of which Rockhopper will seek to recover through an international
arbitration process of which a further update will be provided
shortly.
Appointment of Senior Independent Director and Board committee
changes
Following the retirement of Bob Peters from the Board effective
31 December 2016, Keith Lough, currently non-executive director and
Chairman of the Audit and Risk Committee, has been appointed Senior
Independent Director.
In addition, the composition of the Board Committees has been
reviewed such that each of the Audit and Risk Committee and the
Remuneration Committee will now comprise: Tim Bushell, Keith Lough,
John Martin and John Summers. Keith Lough remains Chairman of the
Audit and Risk Committee and Tim Bushell remains Chairman of the
Remuneration Committee.
For further information, please contact:
Rockhopper Exploration plc
Tel: (via Vigo Communications) - 020 7830 9700
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
Vigo Communications
Tel: 020 7830 9700
Patrick d'Ancona
Ben Simons
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.
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").
This information is provided by RNS
The company news service from the London Stock Exchange
END
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