Rockhopper Exploration's full-year results hit by Falkland tax

22nd Aug 2013 13:22

Rockhopper Exploration's shares plunged after saying it had widened its annual loss to 75m dollars from last year's 53.7m dollars, reflecting a 122m dollar tax bill from the Falkland Islands government. The oil explorer's posted a loss per share of $26.47 for the year ended March 31st, up from the prior year's loss of $19.92.In October 2012, Rockhopper sold 60% of its stake in the Sea Lion development in the Falklands to Premier Oil for $231m in cash, a $722m development carry and an exploration carry of $45m.The consideration of the farm out of the Sea Lion project triggered a capital gains tax liability. The group was hit with a tax charge of $122m of which $78m related to the tax due to the Falkland Islands government and $44m to a deferred tax charge.Rockhopper is in ongoing discussion with the government over the total amount of tax to be paid.The firm made a pre-tax profit of $47m for the year, up from a loss of $53m in the previous year, but it was offset by the capital gains tax on the Sea Lion farm out."Your board is disappointed with the way that the stock market reacted to the farm out despite our clearly explaining at the last annual general meeting the value created compared to the alternatives," said Chairman Pierre Jungels. "We have around 150m barrels of fully funded oil, which in the present financial market conditions is a good place to be."The Sea Lion has recoverable resources of 337m barrels should a gas cap exist, and 402m barrels if there is no gap cap. Rockhopper expects a 50% chance of a gas cap being in place.The company said it had $298m of resources available at the end of the fiscal year which, putting the group into a strong position to continue playing a lead role in the further exploration of the north Falkland basin.Shares fell 12.75% to 119.75p at 13:57 on Thursday.RD