Rockhopper estimates in trouble

13th Oct 2010 07:47

Rockhopper, the oil and gas explorer that's found oil in the North Falkland Basin, is mulling fundraising options and warns resource estimates for its Sea Lion discovery are currently about 30% less than predicted in June due to a lack of data.The company says it hasn't had enough time to collect a complex set of new data and interpretations to resolve the reservoir distribution with the multiple stacked fans at Sea Lion. "It is likely that any CPR (Competent Person's Report) based on the limited data currently available would result in a lower figure for both oil in place and contingent resource than is contained within the existing preliminary estimate of resources reported in the volumetric update published in June 2010," the firm said Wednesday.Technical consultants have told it that if a report, originally expected before the end of 2010, was produced today, both the P50 oil in place and 2C contingent resource numbers might reduce by "a factor in the region of 30%"."However, this would not reflect the board's view of the prospectivity of Sea Lion, not least in the light of the preliminary nature of the analysis undertaken to date," chiefs added.An updated CPR will be issued in the second half of 2011 following an intensive drilling campaign.On a brighter note, Rockhopper has identified a number of "highly attractive" new targets.The owners and managers of the Ocean Guardian semi-submersible drilling unit, which is operating in the Falkland Islands, has recently proposed a new rig contract to include three firm wells and five options extension.It has also has entered into two letters of intent with a seismic contractor to acquire additional 3D seismic data using two separate vessels. But exploring in the choppy waters off the Falkland Islands isn't cheap."Whilst the Sea Lion discovery has enhanced prospects for the company and its shareholders, further significant exploration activity will need to be undertaken given the frontier nature of the basin, to prove up the full potential of that basin," said Rockhopper. "The company is therefore currently evaluating its funding options, which may include an equity issue."