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Following the rig departure (LSE:RKH) Rockhopper Exploration and (LSE:FOGL) Falkland Oil & Gas have increased in awarness. This is also down to hedge funds and investors starting to climb on board for what could be the start of opening up a new North Sea around the Falklands based on solid past drilling campaign knowledge and proven discoveries.
(LSE:RKH) Rockhopper Exploration has confirmed use of the first four wells in the North Basin, all baring one has (LSE:FOGL) Falkland Oil taking an interest. Detailed geo interpretation can be seen on my in depth Rockhopper review article by clicking on my authors name or viewing my personal blog.
The order it seems will be Zebedee, Isobel, Jayne East and Chatham. The entire upside to Rockhopper will be in the 1H of 2015. So the share price STILL seems way undervalued given the good news to the company and relative underperformance compared to Falkland Oil . More to the point the 160m low risk prospects net does not include Isobel as in previous RNS, with a total target of 500m gross. Cost wise Rockhopper is fully funded and paid for with drilling option modifications saving both companies costs.
Now onto (LSE:FOGL) Falkland Oil & Gas. Interpretation of the 3D seismic has increased prospects namely new ones such as Stingray 266m and Starfish 402m recoverable in addition to increasing Scharnhorst North, i believe second drill prospect from 188m to 355m. This prospect is very near the Darwin discovery of condensate. Remember Scharnhorst is at a higher level TD wise with oil targets derisked by Darwin condensate discovery.
However the RNS clearly mentioned the word apprasial, cleary Tim Bushell CEO is expecting a good chance that Humpback will come in to mention this and should be taken as a positive point.
Humpback 510m is still clearly the first choice and the calibrated wells of past campaigns highlighting this very promising area. Again detailed geo can be seen on in depth Falkland Oil article on my personal blog or clicking my authors name.
While reviewing the new Falkland Oil presentation dated 2 Feb 2015 both Stingray middle area and Starfish north area are additional prospects in the South Basin. In the North basin a new 100% interest prospect called Susan 340m has attracted attention near to Isobel which if positive would follow through.
The recoverable case on Falkland Oil is a mouth watering North Sea style 1.4 billion barrels recoverable of gross oil. Making the company the leveraged play on the Falklands exploration.
So in summary both companies are investable and BUYS. The safer and bargain price out of the two (LSE:RKH) Rockhopper Exploration or higher risk reward potential of (LSE:FOGL) Falkland Oil & Gas. However both have interest in the first low risk well Zebedee 52% cos Sea Lion extension or butt which is stated in writing on (LSE:PMO) presentations.
I would remind investors who were around in 2014 the same geo odds as my Hurricane Energys call in existing discovered North Sea field in 2014 and you know what happened next.
Moving onto Oil Barrel Conference this week regarding Rockhopper Presentation i have some interesting notes. The main financial aspect was the cost savings per well of $20m after the first six wells are completed. With a $200m gross saving on Sea Lion Development so far.
It seems Zebedee will be drilled on development drilling so confident are Rockhopper of the southern area being commercial rather than apprasial element thus saving on capex. The company also decided against investing in Argos they had a look but i think the geo put them off as a higher risk play. Rockhopper and Premier Oil expect every well to hit as mentioned before low risk on there presentations.
However an interesting point came from the audience about what price Sea Lion is commercial the reply from Chief Financial Officer Steward MacDonald was “I do not want to be too precise about breakeven on Sea Lion because clearly we are at pre FEED still but i think Premier are on record as saying that they see break even on Sea Lion at around $20 per barrel excluding the FSPO lease costs”. This is even below $35 breakeven well known mentioned analysis.
The rest of the presentation is already detailed in my origional in depth Rockhopper Exploration article.
Its not to late to register with advfn below to gain extra knowledge of the Falklands campaign from a range of data and bulletin boards and share the experience with others.
Updated Chrisoil Podcast Falklands Special can also be seen at http://www.chrisoil.blogspot.co.uk
Until the next time more ramblings at the castle can be seen @chrisoil
