Rockhopper Exploration, the North Falkland Basin oil and gas exploration company, is pleased to announce results for the twelve months ended 31 March 2011.
Flowing our latest well at commercially viable rates this June has been another valuable step for Rockhopper in establishing the commerciality of Sea Lion.
Since Rockhopper’s discovery on the Sea Lion field in May 2010, our focus has been on reaching a final investment decision and undertaking the work streams required to do so. These work streams are:
- Appraisal: to define the field size,
- Engineering: to define the field development and
- Financing: to define the field economics.
All three are being run in parallel, are making good progress and are communicating well with each other.
The appraisal of the Sea Lion field has got off to a very good start with successful results on both wells 14/10-4 and 14/10-5, which was flow tested at commercially viable rates. The next well, 14/10-6, will be drilled to the west of the discovery and, if successful, will add to our view of the low case scenario of the field, of 155 million barrels recoverable. Naturally, the results of each well influence the number and location of subsequent wells but our understanding of the field is growing rapidly and this will be fed into the static and dynamic reservoir models needed for an updated competent person’s report and a development plan.
The engineering work started with the appointment of a full time development manager who has already visited the Falkland Islands to get first hand experience of the socio-economic, logistical and engineering factors, that such an offshore development has to consider. We are also well advanced with our concept screening and, once this and our appraisal are completed, we will be able to set the scope for our front-end engineering design requirement.
Rockhopper is fully funded to complete the Sea Lion field appraisal, although a development would naturally require considerable further financing. We expect development finance to come from a range of sources including industry participants, reserve based lenders and the equity market. As we are operating in a new basin, we expect the process to take longer than in a mature region and so have already started initial meetings with the lending banks. Work on financing will inform our economic models and help derive minimum economic field sizes and likely economic values.
The first major milestone in reaching a final investment decision will be the delivery of the field development plan, required by April 2013, to the Falkland Islands Government. Throughout the life of Rockhopper we have enjoyed open and cooperative relations with the Falkland Islands Government, particularly the Department for Mineral Resources, and continuing on the same basis will be critical to the development phase.
Rockhopper also completed an extensive 3D seismic acquisition programme at the end of May 2011 that included data collection to the south of the currently mapped Sea Lion discovery as well as the Johnson and Weddell prospects. The fast tracked data has already been processed and will be interpreted as soon as possible and the balance is expected to be processed by the end of September 2011.
Rockhopper has been transformed by the discovery on Sea Lion, of which we are in the rare position of holding 100%. We are progressing through a very exciting and valuable phase in the group’s development. We are wholly focused on the Falkland Islands and look forward to interpreting the processed data from the recently acquired 3D seismic to identify further opportunities within the basin.
Dr. Pierre Jungeles CBE