Rockhopper shares soar after Sea Lion development

13th Nov 2014 16:15

Rockhopper Exploration said costs to first oil for the Sea Lion field in the South Atlantic have been reduced.The Falkland Islands oil explorer said costs for the project, which the company runs with partner Premier Oil, are now estimated at under $2bn.However, the target date for first oil production has been postponed to 2019."Overall, we are delighted with this revised approach as it materially reduces uncertainty of first-oil from Sea Lion, which we expect to be on production in 2019, as well as very significantly reduces the capex required to reach production," said group chief executive Sam Moody.The company added that the initial phase will now commercialise about 160m barrels of oil with a floating platform targeting 50,000-60,000 barrels of oil per day.The firm said it will get a $48m exploration carry for the 2015 drilling campaign and will contribute to about $100m or 40% of pre-sanction costs.On the back of the development with the Sea Lion progress, Liberum upgraded Rockhopper shares to 'buy' rating and a target price of 236p.Shares in the oil explorer had soared 14.54% to 80.75p at 16:32 on Thursday.