Broker snap: Rockhopper technical update cheers Goldman

6th Apr 2011 16:02

North Falkland Basin oil and gas explorer Rockhopper's technical announcement on 4 April was well received by Goldman Sachs analysts.Goldman writes: "A conservative 20% recovery factor on the low case oil in place gives a recoverable volume of 100 mn bls which we would believe to be comfortably commercial. Crucially, the two successful wells on Sea Lion appear to be in communication which further enhances the prospects of commercialisation in our view. Potential flow rates from this part of the reservoir also should be better than previous flow rates. GS: encouraging additional update. We believe the recent underperformance is unwarranted and believe that this update should be taken positively by the market". Rockhopper said that day, among other things, that, "Management interprets new low case area of 22 square kilometres with stock tank oil initially in place (STOIIP) of 516m barrels giving 155m barrels recoverable at a 30% recovery factor."ab