MercoPress. South Atlantic News Agency

Falklands' (oil exploration) “has been a hugely successful campaign”, says Rockhopper

The notice to terminate follows a number of operational issues with the Eirik Raude rig. Chatham well is deferred until Sea Lion pre-development drilling campaign.

Rockhopper Exploration which has a joint venture agreement with Premier Oil offshore the Falkland Islands, described the oil exploration campaign now terminated as a 'huge success' and underlines the postponement of the Chatham well drilling will have no impact on the Field Development Plan for the Sea Lion oil discovery development.

In a brief release on Friday, Rockhopper (the oil and gas exploration and production company with interests in the North Falkland Basin and Greater Mediterranean region) announced that Premier Oil (on behalf of the Joint Venture) has served a notice to terminate the rig contract with Ocean Rig UDW with immediate effect.

The notice to terminate follows a number of operational issues with the Eirik Raude rig. As a result, the drilling of the Chatham well - the final well in current campaign - will now be deferred until the Sea Lion pre-development drilling campaign.

The postponement of the Chatham well has no impact on the planning or timetable for the Field Development Plan for the Sea Lion initial phase development.

Rockhopper had an unaudited cash balance of approximately $110 million at the end of December 2015. Taking into account the expected residual costs of the current exploration campaign and the Company's continued investment in Sea Lion FEED activities, preliminary estimates of the Company's cash balance at 31 December 2016 are now in the range of $70 - 80 million.

The year-end 2016 preliminary cash estimate is subject to the outcome of a number of material items including exploration drilling cost audits, disputes and insurance claims - the outcomes of which should be known around mid 2016.

Rockhopper CEO Samuel Moody said that despite the postponement of the Chatham drilling, the terminated Falklands' exploration round has been a hugely successful campaign.

“Whilst it is a shame not to be able to drill Chatham as part of this campaign, the resources added at the Zebedee location, along with the potentially very significant discoveries in the Isobel/Elaine area, mean that from a sub surface perspective this has been a hugely successful campaign”.