OilOnline posted on 10/26/2009
Rockhopper Exploration plc, the North Falkland Basin oil and gas explorer, announces that it has conditionally placed 92,592,593 new Ordinary Shares at 54p per share through Canaccord Adams with institutional investors and certain of the Company's shareholders to raise 50 million before expenses. The Placing Shares equal 115 per cent. of the Ordinary Shares currently in issue. The 54p placing price represents a discount of 16 per cent. to the closing middle market price for an Ordinary Share on Friday 23 October 2009. The Placing has not been underwritten.
The Placing is conditional on (i) the passing of a Resolution at a General Meeting of the Company authorising the allotment of the Placing Shares under the Placing, (ii) the admission of the Placing Shares to trading on AIM becoming effective by 9.00 a.m. on 13 November 2009 (or by such later date or time as the Company and Canaccord Adams may agree), and (iii) a placing agreement dated the date of this announcement between the Company and Canaccord Adams becoming unconditional in all other respects by the same time.
Since securing its four North Falkland basin exploration licences in 2004 and 2005, Rockhopper has completed extensive seismic surveying and technical evaluation, resulting in the classification within a Competent Persons Report by RPS Energy commissioned by the Company dated 28 April 2009 (the "RPS" CPR) of the 1998 14/5-1 well as a gas discovery, and the identification of numerous prospects and independent play types on the Company's acreage in the North Falkland Basin. Rockhopper also has a 7.5% licence assignment with Desire Petroleum plc to farm into PL003 and PL004, two of Desire's Falkland Islands exploration licences.
Highlights from the RPS CPR include:
- the top eight oil prospects total approximately 1 billion barrels of prospective (unrisked) oil resources
- an estimated 23% chance of success for the Group's two prospects, Sea Lion and Ernest
- Sea Lion and Ernest each have an NPV10 of US$2.5 billion at the P50 level ($80 per barrel assumed)
- gas discovery and contingent gas resource recognised, thereby proving an active hydrocarbon system
Sea Lion and Ernest are Rockhopper's primary oil prospects. Both have direct hydrocarbon indicators - Sea Lion in the form of an AVO anomaly, Ernest in the form of a positive CSEM anomaly - and both are clearly defined on seismic surveys. A further six targets were considered in the RPS CPR which, together with Sea Lion and Ernest, have a potential to contain 3.3 billion barrels of oil in place under the best estimate provided by RPS Energy.
On 30 September this year Desire entered into a four well rig services supply contract with Diamond Offshore Drilling for the use of the Ocean Guardian rig in a 2010 drilling campaign in the North Falkland basin. This contract includes an option for Desire to extend the contract to cover up to an additional six rig slots. Earlier this month Desire agreed to make two of these slots available to the Company, subject to the Company committing to take up the slots and satisfying certain other conditions before the end of November. These include the Company depositing in an escrow account certain amounts to be paid by it for the two slots and Desire, Diamond Offshore Drilling and Rockhopper having entered into an assignment agreement in respect of the rig services contract in so far as it applies to the two slots. In addition, Rockhopper is required to fund 15% of the dry hole cost of drilling three wells across Desire's licences PL003 and PL004 in accordance with its 2005 7.5% interest farm-in agreement with Desire. The Placing will provide the Company with the necessary funds to finance the drilling in 2010 of two wells on its North Falkland basin prospects and to meet its financial commitments under its 7.5% interest farm-in agreement with Desire in respect of three wells that are to be drilled by Desire in 2010.
The Ocean Guardian is due to depart from the UK North Sea by early December and is expected to commence drilling in the North Falkland Basin in February 2010. Rockhopper anticipates using the Ocean Guardian to drill the Ernest and Sea Lion prospects located within its exploration licences PL024 and PL032 respectively. These are 100% owned by the Group, represent the Company's principle oil targets and are estimated by RPS Energy (as set out in the RPS CPR) to contain P50 recoverable prospective resources of 156 mmbbls and 170 mmbbls respectively.