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Rockhopper rises after new Falklands oil find

Greenland may be looking like a no-oil zone for Cairn Energy but Rockhopper Exploration has higher hopes for its controversial Falklands programme.

After a few false starts from explorers in the area, Rockhopper said the fifth well at its Sea Lion complex had found a high quality reservoir package and oil column. The company will now move on to its next well which will continue to target the Sea Lion site as well as the Caspar and Kermit prospects.

Separately Rockhopper said it expected to spend bn on developing the region on the basis of recoverable resources of 350m barrels of oil, with the first oil achieved by early 2016. It did not explain how it planned to fund the costs although it will have enough to complete the current well and two committed drilling slots. Keith Morris at Evolution Securities said:

Rockhopper seems to have a good handle on the reservoir distribution in the Sea Lion Discovery and the economics look compelling too. It remains our favoured North Falkland play at present.

Canaccord said it expected subsequent capital expenditure to be funded out of cash flow, while Oriel Securities said the results from the appraisal well was positive for derisking the resource volumes.

The news from Rockhopper, up 3p at 249p, could however spark more protests from Argentina, which claims sovereignty over the Falklands. © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds