MercoPress. South Atlantic News Agency
Falklands’ Rockhopper “High Quality Reservoir” Oil Find Boosts Shares
Managing Director Samuel Moody promised a flow test for Sea Lion prospect Rockhopper Exploration (LON:RKH) oil discovery in the Falklands Islands is of “good” quality said on Friday a release from the company. The announcement had a positive impact on shares of all Falklands’ oil explorers.
New data from the Sea Lion prospect confirmed “53 meters of net pay in multiple zones, with the thickest sand at about 25 meters of net pay and average porosity of 19 percent,” said the company. “These are further encouraging results; the logs clearly indicate that we have encountered a high quality reservoir interval with very good porosity and permeability. This increases the likelihood that we will return to this well later during the campaign to carry out a flow test,” said Managing Director Samuel Moody according to an official release from the company.
Data released Friday by Rockhopper Exploration (LON:RKH) means “the reservoir is good and shares are bound to rise on the back of this,” said Richard Rose an oil analyst at Oriel Securities Ltd. On Thursday, following the “discovery of oil” announcement, the company’s shares ballooned 153%.
The oil exploration rig Ocean Guardian, contracted by Desire Petroleum (LON:DES) for the current round, spudded the 14/10-B well on 16 April on license PL032, which Rockhopper operates with 100% interest. The well was drilled to 2744m, and its oil shows make it the first oil find in the North Falkland Basin.
Rockhopper said it will now proceed with additional log analysis and collect fluid samples and intends to run a liner to allow the well to be suspended for future testing. The company also confirmed it intends to drill its 100%-held Ernest prospect in the fourth slot of the overall Falklands Drilling program.
The “good quality” oil discovery follows Desire Petroleum’s experience that at the end of March announced it had also discovered signs of hydrocarbons but “commercially non viable”. The Liz prospect was sealed and abandoned. However, Desire is expected to drill a total of four wells in the North Falkland Basin before the end of the current round. Two other companies have licences, Borders & Southern Petroleum (LON:BOR) and BHP Billiton (NYSE:BHP) in association with Falkland Oil and Gas (LON:FOGL), and are also planning to drill with the Ocean Guardian rig.
Argentina, which disputes the Falklands/Malvinas Islands, rejected Thursday in a strongly worded statement the “illegal” UK exploration for hydrocarbons in the Islands' waters and anticipated it would address the issue at the coming Madrid Latin America, the Caribbean and the European Union Summit (LAC-EU) on May 17/18. Argentina “will take the necessary actions to avoid Great Britain from taking illegal possession of Argentina's non-renewable resources,” underlined the release.
Meantime in London, Rockhopper, following the Thursday 150% increase in share price to 93.50p, then settled back on profit taking. Other explorers in the region rose substantially but profit taking on those stocks seem to have taken hold Friday. Desire Petroleum, an old favourite amongst the Falkland’s explorers, rose 63% yesterday to 61.5p but was down 3.5p to 58p; Falkland Oil and Gas up 14% Thursday was down 11p (-7%) to 145.50p and Borders and Southern Petroleum up 20%, was down Friday 1.75p to 52.25p.
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Read all commentsThis is indeed more excellent positive news I might start buying shares myself. I really wish that Argentina could have used this opportunity to encourage conciliation instead of confrontation, the latter seems to have got them nowhere....
May 08th, 2010 - 09:40 am 0As for it being their resources and great Britain taking it.....wrong on both fronts sadly.
1. If it were Argentina's resource, why aren't they drilling.
2. If it was illegal was has no one else protested except Argentina.
3. the United KIngdom is not taking the resources, it is an exploration campaign run by private companies registered in the UK and the Falklands.
4. It was the Falklands Islands government who approved the drilling, the UK didn't.
I am quite sure if Argentina asked nicely she would be allowed to take some of the Falklands resources...
It would make a lot of sence for Argentina to collaborate and will provide a much needed boost for the Argentine economy. Once CFK gets the boot next year then the new government will be much less jingoistic. CFK will of course try to buy the votes of the shanty town dwellers with gifts of fridge etc.
May 08th, 2010 - 07:10 pm 0Either way there are other South American countries who to work with the Islands due to the vast dollar value this project has. With the price of oil likley to remain high in comparison to historic levels the raw crude could even be shipped to west africa or Europe. This will be for BP or Shell to worry about and my investment will be bought out by one of these boys. Argentina can do nothing about it so onward and upwards for those with common business sence!
If Argentina can't act like a normal, civilised neighbour, it can 'go to heck' for all the UK should care about the matter. We can quite easily use our own expertise and resources to develop the fields, process on the Falklands, and keep all the wealth in UK/Falklands coffers, not Argentina's. It will teach them not to make stupid threats that they can't back up. I mean, should they try anything again like in 1982, we could use our nuclear subs and cruise missiles to level half their silly country within days.
May 09th, 2010 - 04:57 pm 0I've had a massive grin on my face since I learned of this oil find news, if only because so many Argentine teenagers will shortly post on Mercopress (in their inevitable broken English) to express their impotent rage at our good fortune. Heh Heh :o)
It's like living next door to a tramp who can't afford to pay any of his bills, whilst our own financial situation gets better and better. The Argentines can't rant and rave all they want, whilst we laugh ourselves silly.
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