Posted by OilVoice Press - OilVoice
Rockhopper Exploration plc (AIM: RKH), the oil and gas 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 2017.
Funding package for the Sea Lion Phase 1 development progressing; working towards final investment decision by year end 2018
· Estimated capex to first oil reduced from US$1.8 billion to US$1.5 billion
· Life of field costs down to less than US$35 per barrel
· Letters of Intent signed with contractors for a range of services and vendor financing
· Discussions progressing with senior debt providers including commercial banks and export credit agencies
· Field Development Plan substantially agreed with the Falkland Islands Government
· Environmental Impact Statement public consultation process completed
Building a material production base in the Greater Mediterranean to maintain balance sheet strength and fund future growth
· Material increase in production - net working interest production averaged 1.2 kboepd in 2017 (2016: 0.8 kboepd)
· Revenue up 40% to US$10.4 million (2016: US$7.4 million)
· Cash operating costs of US$9.5 per boe - maintaining a low cost base
· Continued management of G&A costs - US$5.3 million - down over 50% in 3 years
· G&A costs covered by operating cash flows
· Sale of non-core interests in Italy - US$9.5 million of future decommissioning costs removed from balance sheet upon completion
· Initiated international arbitration against Republic of Italy to seek significant monetary damages in relation to Ombrina Mare
· Balance sheet strength maintained with cash resources of US$51 million at 31 December 2017 and no debt
· Progress Sea Lion towards final investment decision by year end 20181
· Four well drilling campaign in Egypt to commence in Q2 2018
· Ombrina Mare arbitration hearing date set for early February 2019
· Continued pursuit of new venture opportunities to add production and cash flow
1 Operator estimate
David McManus, Chairman of Rockhopper, commented:
"Significant progress has been made in 2017 to advance and execute the contracting strategy and financing plan for the Sea Lion Phase 1 development.
"In the Greater Mediterranean, the Company has successfully established a portfolio that provides a low-cost, short-cycle production base which has delivered record revenues and operating cash flows in 2017 and more than covered the Group's substantially reduced G&A costs. On a highly selective basis, we continue to seek to further expand our Greater Mediterranean production base with the aim of generating additional free cash flow to invest in future exploration and value‐accretive growth opportunities both in the Falklands and elsewhere.
"As we advance through 2018, Rockhopper is highly focused on securing the funding required to be in a position to reach a final investment decision on the Sea Lion project by the end of the year and move into the development phase. With Brent oil prices currently above US$70 per barrel, combined with the cost efficiencies secured through FEED and engagement with the contractors, the economics for the project are highly attractive."
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