Rockhopper Exploration swings to loss after 2025 arbitration blow

(Alliance News) - Rockhopper Exploration PLC on Wednesday reported that it had swung to a loss in 2025, hurt by higher expenses and an arbitration blow.

The Salisbury, England-based oil and gas miner with key interests in the North Falkland Basin swung to a pretax loss of USD42.0 million in 2025 from a profit of USD76.8 million the previous year.

Its attributable loss totalled USD39.7 million, swinging from an attributable profit of USD47.6 million.

Rockhopper shares fell 1.6% to 75.66 pence late on Wednesday morning in London.

The wider loss reflected a surge in other expenses, which multiplied to USD69.7 million from USD1.0 million. This was due to a USD42.9 million reduction in the fair value of a monetisation agreement, recognition of a liability for the potential repayment of USD21.6 million in insurance proceeds, the write-off of the remaining USD3.9 million insurance premium prepayment and other costs of USD1.3 million.

Other income was less than half that of the year prior, falling to USD35.2 million from USD79.8 million. This represents EUR31 million in insurance proceeds receivable following the annulment of a payment Rockhopper had expected from Italy.

Back in June, a committee ruled in favour of Italy, which annulled the award of damages to Rockhopper, meaning Rockhopper would not receive EUR65 million from a monetisation agreement. In September, Rockhopper filed a new arbitration request.

"To the extent Rockhopper makes any future financial recovery from the resubmitted arbitration or otherwise, after deducting reasonable costs and expenses, that recovery will be utilised to reimburse the insurers," the company noted.

At the end of December, Rockhopper's cash balance was USD157.6 million, up from USD900,000 a year prior. It held a further USD8.3 million in cash via Rockhopper Civita Ltd, classified under assets for sale, and an undrawn debt facility of USD350 million, bringing year-end liquidity to USD521.0 million.

Chief Executive Sam Moody called the past year "a transformative period for Rockhopper as the Sea Lion project moves into full development phase following its financing and sanction late in 2025."

Moody continued: "We look forward to continuing our very constructive working relationship with operator Navitas in the coming months as we further progress the project. We remain hugely grateful for shareholders' continuing support and look forward to updating them on Sea Lion in due course."

Last month, Rockhopper reported that Navitas Petroleum LP, the operator of the Sea Lion project, is changing the location for upgrades of the Aoka Mizu floating production storage & offloading vessel from the Middle East to Asia due to the conflict in Iran.

This is expected to add USD45 million to the current development budget and increase Rockhopper's equity costs by net USD5.3 million, though Rockhopper said it remains funded for phase one of the Sea Lion project.

Navitas has signed a memorandum of understanding to obtain another FPSO, which could raise capacity by a further 125,000 barrels of oil per day, of which 43,750 bopd would be net to Rockhopper. This would be in addition to the Aoka Mizu's capacity of 55,000 bopd with 19,250 bopd net to Rockhopper.

Rockhopper has maintained that it expects first oil from its Falkland Islands operations in the first half of 2028.

By Holly Munks, Alliance News reporter

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