Rockhopper Exploration (LSE: RKH) — the Salisbury-based oil and gas exploration company — announced this morning that Premier Oil has signed a contract for a drilling rig to drill a minimum of four firm wells in the North Falkland Basin, as part of an exploration and appraisal campaign that is expected to commence in Q2 2015. Premier Oil acquired 60% of Rockhopper’s interests in its North Falkland Basin licences in October 2012.
Under a sharing agreement, the rig will also be used by Houston-based Noble Energy to drill two firm wells in another part of the Falklands. In addition, eight options that can be exercised prior to mobilisation of the rig have been secured, with a further eight that can be exercised at key point of the drilling operations.
Rockhopper says it anticipates that the first two firm drilling slots to drill in the Zebedee and Isobel/Elaine prospects, with Noble taking the third and fourth slots, before the rig returns to the North Falkland Basin for the final two firm wells, which the company says are likely to be the Jayne East and Chatham/Sea-Lion West Flank locations.
Commenting on the announcement, Rockhopper CEO Sam Moody said:
“We are very pleased that the contract for this rig has been signed and that we can now get planning in earnest for the next exploration drilling campaign. The four firm wells in the North Falklands Basin will target a total of over 520 mmbbls [million barrels] of STOIIP [Stock-tank oil initially in place] net to Rockhopper (management estimate) and will bring the total number of wells Rockhopper has drilled in the Falklands as both Operator and non-Operator to 19. Given our track record in the basin we are confident that the targets of our new drilling campaign are highly prospective. We continue to work closely with Premier as we jointly move the Sea Lion project towards Final Investment Decision.“
At 96.25p, Rockhopper’s share price stands almost 30% down on this time last year, during which time the FTSE has gained 4%. But over five years, Rockhopper has trounced the index, increasing 177% versus the FTSE 100’s 55%.
