Rockhopper Exploration plc (AIM: RKH), the oil and gas company with key interests in the North Falkland Basin and the Greater Mediterranean region, has announced its results for the six months ended 30 June 2016.
During the Period:
FEED contracts for the Sea Lion development awarded to a set of world class contractors.
All-share merger with Falkland Oil & Gas Limited (FOGL) completed - consolidating Rockhopper's leading North Falkland Basin acreage position.
Independent resource audit following the successful North Falkland Basin exploration campaign confirms:
2C oil resources in the Sea Lion Complex of 517 million bbls (258 million bbls net to Rockhopper).
3C oil resources in the Sea Lion Complex of 900 million bbls (452 million bbls net to Rockhopper).
Near field, low risk exploration upside of 207 million bbls (105 million bbls net to Rockhopper (Best Case, unranked).
Significant additional discovered contingent and low risk prospective resources audited in the Isobel-Elaine Complex.
Audit further supports Rockhopper's view that the North Falkland Basin has the potential to ultimately deliver a billion bbls of recoverable oil
Amended terms agreed for the acquisition of Beach Petroleum (Egypt) Pty Limited (Beach Egypt), comprising a portfolio of non-operated production and exploration interests in Egypt.
Post 30 June 2016:
Further cost reductions achieved at Sea Lion as we progress through FEED - estimate of capital investment required to reach first oil reduced to US$1.5 billion (gross), reducing the project's break-even price to US$45/bbl.
Material increase in production following the completion of Beach Egypt acquisition - average Group production of approximately 1500 boe/d expected during the remainder of 2016.
Balance sheet strength maintained with cash resources at 1 September 2016 of approximately US$75 million
David McManus, Chairman of Rockhopper, commented:
'We continue to make very good progress in advancing the Sea Lion development, taking advantage of the current industry backdrop to reduce costs and the break-even oil price required to sanction.
The results of the highly successful exploration campaign and the subsequent independent resource audit further supports Rockhopper's view that the North Falkland Basin has the potential to deliver multiple future phases of development and, ultimately, a billion barrels of recoverable oil.
As a result of the recently concluded acquisition of Beach Egypt, our production for the remainder of 2016 is estimated to be approximately 1500 boe/d, with operating cash flows expected to broadly cover the Group's overheads going forward.'