Rockhopper will not return cash until Sea Lion costs are clearer

19th Dec 2013 08:07

Falkland Islands oil & gas group Rockhopper Exploration announced progress in developing its Sea Lion field and a tax deal with the islands' government as it posted lower half-year losses.But the group, which has investor approval to buy back a tenth of its shares, said it would not be able to consider returning cash to shareholders until the likely costs of the Sea Lion project and further exploration are clearer.Rockhopper said technical work undertaken since the end of its last financial year had given it an even more positive view of the scale of Sea Lion.The group hopes to complete the field concept development process early next year and to sign a contract for a drilling unit to begin an exploration campaign in late 2014 or early 2015 involving four wells with potential for up to 800m barrels of oil.Rockhopper, which is partnering with Premier Oil on Sea Lion, said it is fully funded for its share of costs of developing the field to producing the first oil.It added that it had provisionally agreed with the Falkland Islands government that it would pay capital gains tax on the non-cash part of the consideration at the same time as the first royalty from Sea Lion.Pre-tax losses in the six months to September 30th fell to $3.4m from $6.4m.Shares rose 0.5p to 147p at 08:18 in London.PW