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Premier & FOGL Farm-In to PL004a and PL004c

Source: 10/3/2013, Location: South America

Rockhopper Exploration and Premier Oil plc ("Premier") have signed a Heads of Agreement with Falkland Oil and Gas Limited ("FOGL") to farm-in to licences PL004a and PL004c, conditional on the completion announced combination of FOGL and Desire Petroleum plc ("Desire").

Under the terms of the agreement with FOGL, its share of costs for an exploration well on the Isobel/Elaine prospect (PL004a) and an exploration well on the Jayne East prospect (PL004c) will be carried by Rockhopper and Premier. Rockhopper estimates these wells will target Pmean gross STOIIP of 1,078 mmbbl and 289 mmbbl respectively.

In accordance with a prior agreement with Premier, Rockhopper and Premier will split the revised equity interests in the ratio 40/60. Under the terms of the same prior agreement, Premier agreed to carry up to US$48 million of Rockhopper's share of three exploration wells in the North Falkland Basin. This was originally intended to apply only to the licence interests held at the time of the Sea Lion farm-out but Rockhopper and Premier have agreed to extend its terms. As a result, while the overall cap will remain at US$48 million, Rockhopper can elect to be carried for its original interest plus up to US$6 million associated with the additional working interests it will acquire as a result of the farm-in.

The farm-in is subject to completion of FOGL's combination with Desire and customary Falkland Island Government approvals.

Sam Moody, Chief Executive, commented:

"We are delighted to have agreed this farm-in, which allows Rockhopper access to a much larger working interest in what we regard as highly prospective acreage. Situated in the North Falkland Basin, it includes the Isobel/Elaine and Jayne East prospects and is adjacent to the Sea Lion development.

In addition, we believe that the transactions announced today will increase the likelihood of a drilling rig being shared by a number of regional operators as we look to initiate an exploration programme in late 2014 or early 2015."

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 

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