MercoPress. South Atlantic News Agency

Rockhopper raises £ 50 million to finance summer drilling offshore Falklands

At least six exploration wells are planned to be drilled this summer

Rockhopper Exploration, the oil and gas explorer company working in the North Falkland Basin has raised £50 million in a 54p per share placing with institutional investors.

The move follows news last month that Rockhopper’s partner company in the Falkland Islands, Desire Petroleum, had secured a rig contract ahead of a planned drilling campaign starting in February next year.

According to a Monday release from Rockhopper Exploration 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% of the Ordinary Shares currently in issue.

As part of Desire’s deal with the drilling contractor, Rockhopper has secured six option wells, two of which it has agreed to take up. In addition, a farm-in agreement over licences PL003 and PL004, signed between the two sides back in 2005, will be triggered by the new drilling campaign.

As part of that agreement, Rockhopper is required to fund 15% of the dry hole cost of drilling three wells on the licences in return for a 7.5% stake.

Since securing its four North Falkland basin exploration licences in 2004 and 2005, Rockhopper has completed extensive seismic surveying and technical evaluation on the acreage.

An independent survey by consultants from RPS identified 1 billion barrels of prospective (un-risked) oil resources in the company’s top eight oil prospects. Its two main prospects, Ernest and Sea Lion, have an estimated 23% chance of success and are estimated to contain P50 recoverable prospective resources of 156 million barrels and 170 million barrels respectively.

Last September Desire Petroleum 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.

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.