3 Oct 2013 07:03
ROCKHOPPER EXPLORATION PLC
("Rockhopper")
Farm-in to PL004a and PL004c, North Falkland Basin
3 October 2013
Rockhopper Exploration and Premier Oil plc ("Premier") have signed a Heads of Agreement with Falkland Oil and Gas Limited ("FOGL") to farm-in to licences PL004a and PL004c, conditional on the completion on this morning's announced combination of FOGL and Desire Petroleum plc ("Desire").
Under the terms of the agreement with FOGL, its share of costs for an exploration well on the Isobel/Elaine prospect (PL004a) and an exploration well on the Jayne East prospect (PL004c) will be carried by Rockhopper and Premier. Rockhopper estimates these wells will target Pmean gross STOIIP of 1,078 mmbbl and 289 mmbbl respectively.
In accordance with a prior agreement with Premier, Rockhopper and Premier will split the revised equity interests in the ratio 40/60. Under the terms of the same prior agreement, Premier agreed to carry up to US$48 million of Rockhopper's share of three exploration wells in the North Falkland Basin. This was originally intended to apply only to the licence interests held at the time of the Sea Lion farm-out but Rockhopper and Premier have agreed to extend its terms. As a result, while the overall cap will remain at US$48 million, Rockhopper can elect to be carried for its original interest plus up to US$6 million associated with the additional working interests it will acquire as a result of the farm-in.
The revised ownership in the two licences on completion of the farm-in will be as follows:
PL004a | PL004c | |||
Old | New | Old | New | |
FOGL/Desire | 92.5% | 40% | 75% | 40% |
Premier | 4.5% | 36% | 15% | 36% |
Rockhopper | 3% | 24% | 10% | 24% |
The farm-in is subject to completion of FOGL's combination with Desire and customary Falkland Island Government approvals.
Sam Moody, Chief Executive, commented:
"We are delighted to have agreed this farm-in, which allows Rockhopper access to a much larger working interest in what we regard as highly prospective acreage. Situated in the North Falkland Basin, it includes the Isobel/Elaine and Jayne East prospects and is adjacent to the Sea Lion development.
In addition, we believe that the transactions announced today will increase the likelihood of a drilling rig being shared by a number of regional operators as we look to initiate an exploration programme in late 2014 or early 2015."
A presentation summarising the farm-in announced today will be made available on the Company's website at www.rockhopperexploration.co.uk.
Enquiries
Rockhopper Exploration plc
Tel: (via Vigo Communications) - 020 7016 9571
Sam Moody - Chief Executive
Peter Dixon-Clarke - Finance Director
Fiona MacAulay - Technical Director
Richard Slape - IR & Business Development Manager
Canaccord Genuity Limited (NOMAD and Joint Broker)
Tel: 020 7523 8000
Henry Fitzgerald-O'Connor
Vigo Communications
Tel: 020 7016 9571
Peter Reilly
Patrick d'Ancona
This statement has been approved by the Company's geological staff who include Fiona MacAulay (Technical Director), who is a Fellow of the Geological Society of London and a Member of the Petroleum Exploration Society of Great Britain and American Association of Petroleum Geologists with over 25 years of experience in petroleum exploration and management, for the purpose of the Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in respect of AIM companies, which outline standards of disclosure for mineral projects. In compiling the resource estimates the Company has used the definitions and guidelines as set forth in the 2007 Petroleum Resources Management System ('PRMS') approved by the Society of Petroleum Engineers (SPE).
Glossary of technical terms
STOIIP Stock Tank Oil Initially In Place
mmbbl Million Barrels