TIDMRKH
RNS Number : 5516B
Rockhopper Exploration plc
11 January 2018
11 January 2018
Rockhopper Exploration plc
("Rockhopper" or the "Company")
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 corporate
update.
Sea Lion Phase 1, North Falkland Basin (RKH 40% working
interest)
The project continues to move towards sanction at the end of
this year, with work during the second half of 2017 focusing on
progressing the commercial, fiscal and financing elements required
to secure the US$1.5 billion of capex required to achieve first
oil.
The joint venture continues to progress financing for the Sea
Lion project including through senior debt and subordinated
contractor funding streams.
Supply chain and contractor financing
Following a rigorous market engagement process, Letters of
Intent ("LOIs") have been entered into with contractors for the
provision of well services and certain logistical services; as well
as for vendor financing for the Sea Lion Phase 1 development.
Under the terms of the LOIs, an exclusivity period has been
granted to each contractor during which the joint venture will
negotiate binding documentation based on agreed principles for the
provision of both services and vendor financing. During Q1 2018,
the joint venture expects to enter further agreements related to
drilling and the subsea system, again covering both the provision
of services and the balance of the targeted vendor financing.
Senior debt financing
During Q1 2018, in addition to continuing discussions with
regard to a potential export credit supported element to the
financing, the joint venture expects to commence a bank engagement
process with the aim of establishing bank market appetite for the
project. In order to support this, the process to select certain
lender due diligence advisers (particularly in relation to
subsurface and environmental matters), has commenced.
Engagement with Falkland Islands Government ("FIG")
Discussions are progressing with FIG on a range of fiscal,
environmental and regulatory matters. A new draft Field Development
Plan ("FDP") was submitted for discussion with FIG in November 2017
and FIG has recently confirmed it does not anticipate that the
planned discussions will uncover any major issues, and that the
minor issues under discussion should be satisfactorily resolved in
due course. With the FDP and Environmental Impact Statement ("EIS")
substantially complete, a 42-day public consultation on the EIS is
expected to commence in January 2018. Engagement with FIG continues
with a view to obtaining the consents and agreements necessary to
sanction the project in 2018.
Abu Sennan, Egypt (RKH 22% working interest)
Current production from the Abu Sennan concession is stable at
approximately 3,800 boepd gross (approximately 835 boepd net to
Rockhopper) following a number of work over operations conducted
during the second half of 2017.
Studies carried out in 2017 demonstrate a significant uplift in
ultimate recovery is possible through the implementation of water
injection and infill drilling on the Al Jahraa field. Discussions
within the joint venture are ongoing with the aim of agreeing a
work program and budget for the field in 2018.
In November 2017, Rockhopper completed a full review of the
prospectivity of the Abu Sennan concession. A healthy inventory of
prospects and leads has been identified, and Rockhopper anticipates
one exploration well will be drilled in 2018, pending agreement
within the joint venture of the work program and budget.
Ombrina Mare arbitration
As previously announced, in March 2017 Rockhopper commenced
international arbitration proceedings against the Republic of Italy
in relation to the Ombrina Mare project.
The Procedural Hearing for the arbitration took place in
November 2017, Rockhopper submitted its memorial, witness
statements and expert reports in December 2017 and the hearing has
been scheduled for early February 2019.
Rockhopper believes 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.
Year-end cash guidance
In line with previous guidance, Rockhopper's year-end 2017 cash
balance was US$51 million (unaudited).
Sam Moody, Chief Executive of Rockhopper, commented:
"We are pleased to be able to start 2018 by reporting on the
material progress we have made alongside partner Premier in moving
forward many aspects of the Sea Lion project in recent months. We
are delighted to have entered into exclusive LOIs with a number of
the key contractors to Sea Lion and are hopeful of entering more
during the first quarter of 2018. This news, alongside good
progress with FIG on the FDP discussions, and continued engagement
with FIG and other stakeholders on the EIS, represents good
progress in taking the steps required to sanction the Sea Lion
development at the end of 2018.
"We are also pleased that our Egyptian production has increased
c15% versus the H1 2017 average of 720 boepd net , and as we look
to add further value to our Egyptian position, we believe a water
flood program will have a significant positive long-term impact on
overall recovery from the fields ."
Enquiries:
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
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 7830 9704
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
UPDLFFELLVIILIT
(END) Dow Jones Newswires
January 11, 2018 02:00 ET (07:00 GMT)
Rockhopper Exploration (LSE:RKH)
Historical Stock Chart
From Aug 2024 to Sep 2024
Rockhopper Exploration (LSE:RKH)
Historical Stock Chart
From Sep 2023 to Sep 2024