RockRose Energy "well positioned" to navigate economic situation

Published by Nicholas Woodroof, Editor
Oilfield Technology, Friday, 27 March 2020 11:00

RockRose Energy has said it remains well positioned, despite current oil market uncertainties. The company currently has no debt and cash at the close of business on 25 March 2020 of £287 million (£248 million unrestricted), equivalent to £21.89 per share. RockRose was listed on the London Stock Exchange in January 2016, when Brent crude traded below US$30/bbl, and has remained focused on being able to operate in a low oil price environment. Currently the company anticipates unit operating costs of c.US$30/boe in 2020.

The company has hedging in place to support its current CAPEX commitments. RockRose hedged 455 000 bbl of oil hedged at US$65.70 per barrel for 1Q020 and 63 million therms of gas at €0.53 per therm (49p/therm) for calendar 2020. Looking further ahead, an additional 54 million therms has been hedged in each of 2021 and 2022 at €0.41 and €0.45 per therm (38p and 42p) respectively.

The company has previously guided that CAPEX in 2020 would be c.US$200 million, with much of that earmarked for the development of the Shell-operated Arran gas/condensate field. However, other discretionary spending is being reviewed and it is anticipated that at least US$50 million of this CAPEX will be deferred, a drop of 25% and in line with other businesses.

Based on the strength of the company's cash position, the hedging it has in place, and the flexibility of its CAPEX commitments, the Board of Directors still expects to recommend the payment of a final dividend of 25p per share, bringing the total for 2019 to 85p.

The company has not experienced an adverse impact on its operations as a result of Covid-19. The precautionary and contingency measures that have been put in place, on both operated and non-operated assets, are working well. In the Brae field, which is operated by RockRose, there are currently no staff with symptoms and no staff in isolation. The safety and wellbeing of the company's staff remains of paramount importance and RockRose is working closely with the authorities and other operators on this matter.

A further announcement regarding the company's final results will be made once a revised date for publication has been determined, following consultation with the FCA and our advisors.

Andrew Austin, RockRose, Executive Chairman, said: "Following the FCA's request for a short-term moratorium on the publication of preliminary financial statements, I wanted to take this opportunity to update and reassure investors and staff of the company's strength in what are unprecedented times.

RockRose remains well placed to navigate the current economic situation, with the business underpinned by a strong balance sheet, hedging, and management's ability to reduce capital expenditure this year and next, if required."

Read the article online at: https://www.oilfieldtechnology.com/offshore-and-subsea/27032020/rockrose-energy-well-positioned-to-navigate-economic-situation/

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