Rockhopper Exploration publishes NSAI report

Rockhopper Exploration

Rockhopper Exploration plc (LON:RKH), the oil and gas company with key interests in the North Falkland Basin, has announced the publication of an independent resource evaluation conducted by Netherland, Sewell & Associates, Inc. (NSAI) on behalf of Rockhopper.

Key information:

–      Unrisked gross contingent resources 2C 917 mmbbls

o  321 mmbbls net to Rockhopper

–      Unrisked gross contingent resources development pending 2C 727 mmbbls

o  255 mmbbls net to Rockhopper

–      Value of the Rockhopper net 2C 255mmbbls 35% working interest in Sea Lion is US$1.8bn

o  net of royalties and taxes at an oil price of US$70 Brent

Rockhopper holds a 35% working interest in Sea Lion and associated NFB licences and benefits from various loans from Navitas Petroleum in relation to the development, which have been detailed in previous announcements.

Highlights of NSAI independent resource evaluation (oil only):

Unrisked Gross (100%) Contingent ResourcesOil (mmbbls)
 Low estimateBest estimateHigh Estimate
 1C*2C*3C*
Development Pending470727939
Development On Hold78180300
Development Not Viable61015
   
Total5549171,254

*Totals may not sum precisely due to rounding adjustments

Unrisked Working Interest Contingent ResourcesOil (mmbl)
 Low estimateBest estimateHigh Estimate
 1C*2C*3C*
Development Pending165255329
Development On Hold2763105
Development Not Viable235
   
Total194321439

*Totals may not sum precisely due to rounding adjustments

Economic AnalysisOil
Oil price US$70 Brent(MMBBL)NPV 10%
Unrisked Working InterestNet Contingent Cash Flow
Development PendingAfter Falkland Islands Royalty
Contingent Resourcesand Corporate Taxes (US$mm)
Low estimate (1C)1651,046
Best estimate (2C)2551,845
High estimate (3C)3292,474

The development scenario assumed in the report underlying the NPV calculation aligns with the previously disclosed multi-phase 2 FPSO scheme comprising the Northern Development Area phases 1, 2 & 3 along with the Central Development Area phases 1 & 2.

Navitas continues to estimate Capex to first oil on phase 1 of cUS$1.4 bn and in this regard has entered into a number of agreements including an MOU for a FPSO which is currently operating in UK offshore waters, along with various contracts for critical path long lead items including provision of subsea equipment and flexible flowlines.

Additional notes

In a change to previous naming conventions, the entirety of the oil deposits in licences PL032 and PL004 are now referred to as Sea Lion.  Previously, Rockhopper had referred to Sea Lion separately from the Isobel / Elaine accumulation; that is no longer the case.

The difference of 3 mmbbls between the 2C development pending 727 mmbbls contained in the Rockhopper NSAI report and the 2C development pending 730 mmbbls in the Navitas NSAI report is a result of running the reports at different oil price decks resulting in a small change to the economic cut off for the field.  All of the underlying data and other assumptions are consistent.

NSAI have also provided estimates of gross and working interest of i) Contingent Gas Resources, and ii) Prospective Oil and Gas Resources however the Company has not reproduced them in this summary as there is no plan for their development in place. NSAI’s report also includes economic analysis with a low and high oil price sensitivity.

A full copy of the report will be available later today on the Rockhopper’s website: https://rockhopperexploration.co.uk/

Sam Moody, Chief Executive Officer of Rockhopper Exploration commented:

“We are delighted that NSAI have been able to confirm the best estimate potential value of Rockhopper’s 35% working interest in Sea Lion is US$1.8bn net of taxes at an oil price of US$70. 

“We continue to work with the Operator to unlock this potential value for all stakeholders.”

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    Rockhopper Exploration publishes NSAI report

    Rockhopper Exploration plc announces promising independent resource evaluations, revealing significant oil potential in the North Falkland Basin with substantial net value projections.

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