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Rockhopper faces challenge with offshore exploration project in Italy

Thursday, January 7th 2016 - 09:19 UTC
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Italy's parliament recently approved propositions which included the reintroduction of restrictions on offshore oil and gas activity close to the coast Italy's parliament recently approved propositions which included the reintroduction of restrictions on offshore oil and gas activity close to the coast
Rockhopper's Ombrina Mare project lies within 12 nautical miles off the coast of Italy and will therefore be affected by the restrictions Rockhopper's Ombrina Mare project lies within 12 nautical miles off the coast of Italy and will therefore be affected by the restrictions
Italian authorities agreed to extend the suspension until the end of 2016 to give Rockhopper the opportunity to figure out what to do with the asset. Italian authorities agreed to extend the suspension until the end of 2016 to give Rockhopper the opportunity to figure out what to do with the asset.

Rockhopper Exploration PLC on Wednesday was forced back to the drawing board to review its Ombrina Mare project offshore Italy after the country's parliament reintroduced restrictions on activity near the coast. The news could be a blow to the company, which is set to merge with Falkland Oil & Gas Ltd, after Falkland Oil shareholders approved the deal on Tuesday.

 The Italian parliament recently approved propositions which included the reintroduction of restrictions on offshore oil and gas activity close to the coast, banning any exploration or production within 12 nautical miles of the coast.

Italy originally launched the restrictions back in 2010, but these were repealed in 2012 before being reinstated again officially from the start of 2016.

Rockhopper's Ombrina Mare project lies within 12 nautical miles off the coast of Italy and will therefore be affected by the restrictions, prompting the company to launch a full review of the project.

The company's exploration permit over the licence was suspended at the end of 2015 just before the new laws came into effect, but Italian authorities agreed to extend the suspension until the end of 2016 to give Rockhopper the opportunity to figure out what to do with the asset.

Importantly, Rockhopper stressed that none of its other interests in Italy, including the offshore Guendalina gas field, are expected to be impacted by the new legislation.

In a brief statement Rockhopper Exploration plc (AIM: RKH), “the oil and gas exploration and production company with interests in the North Falkland Basin and Greater Mediterranean region”, provides the following update on the status of the Ombrina Mare project offshore Italy:

“The Italian Parliament has approved the 2016 Budget Law which reintroduces restrictions on offshore oil and gas activity including the general ban on exploration and production activity within 12 nautical miles of the coast of Italy. This restriction was originally introduced in 2010 and repealed in 2012.

”Certain exceptions apply for existing production concessions and none of the Company's other interests in Italy, including the Guendalina gas field, are expected to be impacted by this new legislation. The Budget Law came into force on 1 January 2016.

“At the same time, Rockhopper has been granted a 12 month extension to the suspension of the Ombrina Mare exploration permit to 31 December 2016. Ombrina Mare is located within the 12 mile limit and the Company is conducting an in depth review of this new legislation, how the exploration permit is affected and its impact on the Ombrina Mare project”.

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