Rockhopper Announces the Results for Year Ended 31 December 2018

Source: www.gulfoilandgas.com 4/2/2019, Location: South America

Rockhopper Exploration plc (RKH), the oil and gas exploration and production company with key interests in the North Falkland Basin and the Greater Mediterranean region, is pleased to announce its audited results for the year ended 31 December 2018.

Highlights

Sea Lion Phase 1 development – securing senior debt funding represents last major milestone to achievement of FID

- Front End Engineering and Design completed in Q1 2019
- Process to progress contractor LOIs to full agreements well advanced
- Field Development Plan and Environmental Impact Statement substantially agreed with the Falkland Islands Government – final approval expected at sanction
- Good progress made with the Falkland Islands Government on Sea Lion royalty and fiscal terms
- Financing structure progressed – extensive due diligence and assurance process underway
- Vendor financing – contractors have agreed to provide up to US$400 million of funding for the project
- Project momentum building with budget approved in Q3 2018 to increase activity and expand the Operator’s project development team

Greater Mediterranean portfolio continues to deliver stable production with exploration upside

- Net working interest production averaged 1.1 kboepd in 2018
- Multiple oil and gas discoveries as a result of the 2018 drilling campaign at Abu Sennan, Egypt
- Successful infill drilling and implementation of a water injection programme at the Al Jahraa field to enhance production and maximise recoverability
- Oil discovery in the Bahariya de-risks future exploration at this level across the concession

Strong financial performance with continued focus on managing costs

- Revenue of US$10.6 million; operating costs US$4.6 million; cash flow from operations US$5.4 million
- Cash operating costs of US$11.7 per boe – maintaining a low cost base
- Continued management of G&A costs – US$5.3 million – down over 50% since 2014
- G&A costs covered by operating cash flows
- Cash resources of US$40.4 million at 31 December 2018 and no debt

Corporate

- International arbitration hearing in relation to Ombrina Mare took place in February 2019
- Alison Baker appointed as Independent Non-Executive Director in September 2018

Outlook

- Joint venture to submit formal senior debt funding application on Sea Lion Phase 1 in Q2 2019
- Outcome in relation to Ombrina Mare arbitration expected in late Q3 or early Q4 2019 – seeking significant monetary damages
- Active drilling campaign at Abu Sennan, Egypt with four wells planned during 2019
- Appointment of Keith Lough as Non-Executive Chairman following the retirement of David McManus at Company’s forthcoming AGM
- Continued pursuit of new venture opportunities to supplement production, enhance cash flow and strengthen balance sheet

Sam Moody, Chief Executive Officer of Rockhopper Exploration, commented:

“Sea Lion has the potential to be transformational for Rockhopper and the Falkland Islands as a whole. Securing funding is the last remaining major milestone before Sea Lion can reach FID and all efforts are focused on securing such financing to allow the project to move into the development phase.

“The outcome of our international arbitration against the Republic of Italy is expected later this year and following the hearing in February we remain confident that we have strong prospects of recovering very significant monetary damages.

“I would again like to thank David McManus for his efforts as both a Director and latterly as Chairman, throughout a period in which the Company undertook transactions in the Falklands and the Mediterranean and continued to advance the world class Sea Lion development.”


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