MercoPress. South Atlantic News Agency

Rockhopper to raise funds for Falklands' oil exploration

United Kingdom registered Rockhopper Exploration plans to raise 30 million pounds on the London AIM stock exchange in early August for exploration offshore the Falkland Islands, according to company sources.

Rockhopper will be the third UK Company after Desire Petroleum and Falkland Oil and Gas Limited (FOGL) to list on the AIM to obtain financing for exploration in the Falklands.

"There's been appetite certainly in London and the European markets for small oil companies to raise money and list; that has been the case for the last 12 months at least" said William Davidson from Aguila Financial responsible for Rockhoppers PP.RR.

Rockhopper was awarded two licenses in the North Falkland basin, PLO32 and PLO33, in early June covering 1,620 sq km and bringing to four the number of licenses it owns in the basin.

In December 2004 the Falkland Islands government awarded Rockhopper licenses for the PL023 and PL024 blocks covering an area of 4,203 sq km some 50km to the north of the islands in the northern basin.

The two licenses awarded in June were formerly held by Anglo-Dutch company Shell, which carried out a 3D seismic survey and two-well drilling program on the acreage in the 1990s. Oil and gas shows were found in one well and oil shows in the other, but neither well was tested.

"That was a time when the oil price was substantially lower than it is today, so the economic bar was much higher then" Davidson said.

"Oil at US$60 a barrel means regions that wouldn't have been economic at US$10/b are now economic. In general, attention is turning to areas previously overlooked or deemed uneconomic and the Falklands falls into that category," Davidson said.

Rockhopper plans to conduct an extensive 3D seismic survey over its acreage during the next two years.

"We are in discussion with a number of seismic contractors about beginning work on our existing acreage and are excited about the drilling program we are undertaking with Desire," Rockhopper executive chairman Pierre Jungels said in a statement in June.

In February the company signed a memorandum of understanding with Desire Petroleum to farm-in to three wells to be drilled on Desire's acreage in tranches C and D also in the northern basin, where sizeable prospects have been identified. Rockhopper has already identified a number of prospects and leads in its own license areas.

The Falklands benefits from a "benign taxation and royalty environment and this, combined with the relatively shallow water depths in the Rockhopper licences, mean that discoveries of less than 50 million barrels could be economic," the statement said.