AIM-listed Rockhopper Exploration, the oil and gas exploration and production company with key interests in the North Falkland Basin, has announced its audited results for the year ended 31 December 2023.
2023 HIGHLIGHTS
Sea Lion Development
Navitas Petroleum provided details of the updated Field Development Plan ('FDP') and additional independent resource report by Netherland Sewell & Associates ('NSAI').*
- New independent resource report commissioned by Navitas Petroleum
- Optimised for the specifications of identified and available redeployable Floating Production and Offloading vessels ("FPSO"s)
- 2C resource base 791mmbbls, up from 712mmbbls
- Initial development stage targeting 312mmbbls, up from 269mmbbls
- Peak rate up to 55k bopd
- Prolonged plateau of c.8 years
- Improved economics, reduced breakeven at US$25/bbl cost life of field
- Cost to first oil US$1.2bn
- Capex per bbl US$8 life of field
- Opex per bbl US$17 life of field
- NPV 10 > US$4bn gross to the JV at US$77/bbl Brent **
- Environment Impact Statement ('EIS') pre-consultation started in November 2023
- Navitas continues to refine Field Development Plan ('FDP')
- Navitas actively working with leading industry vendors to secure all long lead equipment
Ombrina Mare Arbitration Award
Monetisation of the Award
- Monetisation of Award to Specialist Fund payable in 3 tranches:
- Tranche 1 - Rockhopper will retain approximately €15million (pre-tax) of an initial gross payment of €45million, the balance going to pay the initial litigation funder and available for legal success fees;
- Tranche 2 - Rockhopper will retain 100% of a payment of €65million upon a successful annulment outcome. This amount to be reduced on a partial annulment; and
- Tranche 3 - Rockhopper will retain 100% of a profit share of 20% on recovery above amounts in excess of 200% of the Specialist Funds total investment costs.
- Transaction requires Falkland Island Government ("FIG") consent to complete
- Work continues with FIG to secure consent which should be obtained by end June 2024
- Should consent not be obtained by end June 2024, either side has right to terminate
- The Specialist Fund is paying the legal costs associated with the Award from 20 December 2023
- In case of non-completion, Rockhopper will compensate the Specialist Fund based on their legal fees incurred
Annulment Proceedings
- Italy requested to annul Arbitration Award in October 2022
- Annulment hearing completed April 2024
- Rockhopper and advisors remain confident in merits of legal case
- Continue to be hopeful a decision is possible before the end of 2024
Corporate and Financial
- High calibre, experienced and independent Board
- Focus on maintaining balance sheet strength
- Continued management of costs
* Rockhopper is not an addressee and has not been party to the production of the 2024 NSAI Independent Report. The 2024 NSAI Independent Report has been produced to PRMS standards. The last independent resource report commissioned directly by Rockhopper was the ERCE 2016 Report which had an estimated 2C value of 517mmbbls. See RNS dated 22 January 2024.
** Post royalty, pre-tax.
Simon Thomson, Chair of Rockhopper, commented:
'I am delighted to have joined Rockhopper at such a pivotal point in the Company's history. Whilst risks plainly remain, it is possible that by this time next year we will have both completed the monetisation of our Ombrina Mare Arbitration and seen FID at Sea Lion. Both would be hugely significant catalysts for the Company, and represent the culmination of many years of hard work by our dedicated team. I look forward to working with the team to unlock real shareholder value over the years to come.'
Source: Rockhopper Exploration
