Shares in Rockhopper Exploration (RKH ) jumped nearly 10% during Friday morning trading after the Group unveiled that the Falkland Islands Government ("FIG") has agreed to extend each of the Company's North Falkland Basin Petroleum Licences, until 1 November 2022.
The oil and gas exploration company whose key interests lie in the North Falkland Basin said the decision follows discussions between the joint venture partners, Harbour Energy, the name of the Company created through the Premier Oil and Chrysaor merger, and FIG.
FIG has now agreed to extend the terms of several offshore oil and gas licenses operated by Premier Oil and Rockhopper Exploration, including the one containing the Sea Lion field.
According to Rockhopper’s statement released this morning, the licenses are now set to expire on 1 November 2022. The licences were previously due to expire on 1 May 2021.
Commenting on the decision, Samuel Moody, Chief Executive of Rockhopper Exploration said, "The Company is grateful to the Falkland Islands Government for the extension of its North Falkland Basin licence interests and continued support of the Sea Lion project.”
Shares in Rockhopper Exploration have nearly doubled since the beginning of November 2020. The stock was trading 9.82% higher this morning at 9.5p following the news.
Moody highlighted to investors that the proposed merger of Premier Oil and Chrysaor to create Harbour Energy has brought about “a financially stronger operator to the project.”
He added, “This, combined with the proposed entry of Navitas Petroleum to Sea Lion, creates a solid operational and financial foundation giving the project the strongest possible chance of progressing."
Rockhopper and Premier Oil signed a detailed heads of terms with Navitas Petroleum to farm in for a 30% interest in the Sea Lion project offshore the Falkland Islands in January 2020.
The terms of the deal laid out that interest in Sea Lion licences PL032, PL004b, and PL004c would be aligned as such; Premier 40% (operator); Rockhopper 30%; and Navitas 30%.
Rockhopper believes the transaction will materially strengthen the Company financially.
“We believe that the opportunity to invest in a 500 million barrel fully appraised and engineered project with material additional upside at this point in the cycle presents a compelling opportunity, and one which would lead us towards unlocking the value within the project long-awaited by all stakeholders,” Moody told investors back in November 2020.
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