.

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Well, done my buying, lots of extra cash now pumped into RKH shares at very cheap prices ! :)

RF, it will be back over 350p in 4 weeks. Just wait and see, this is easy money now.

easy money for whoever sold the shares to you.

PP just goes to prove bullshit baffles brains.

Expect plenty of broker buy notes out on Monday morning !

Yes, but not for RKH.

Even S2 looks interesting updip due to oil staining in the core.

"........The Company believes that the lowest sand (Sand 4) could form the downdip, distal part of the S2 feature and will now undertake further analysis to determine the likelihood of oil being present updip in the S2 lobe. Despite the high levels of water saturation in Sand 4, oil staining was observed in the core..."

All 4 cores had oil bleed and oil staining, thats 101 metres of core.

So there is lots of oil around.

Same pressure on Sand 3 as Sea Lion discovery - thats a big thing.

There is lots of very good news in there, those who can read it will make lots of money by buying these low prices.

.........The Company believes that Sands 1, 2 and 3 are likely to be related to part of the main Sea Lion feature, while Sand 4 could be related to the S2 feature.

Oil and gas shows were detected throughout the reservoir intervals. Four conventional cores were cut through the reservoir totalling 101 metres and both the bleeding of live oil and oil staining were observed throughout. However, MDT samples on Sands 1, 2 and 4 returned water.

A number of live oil samples were recovered from Sand 3 using a standard MDT tool, samples were approximately 20% live oil and are indicated to be medium gravity.

The Company then performed a mini Drill Stem Test ("DST") on Sand 3 by using a dual packer MDT tool downhole. During the test, water was produced into the well. Further technical work is required to understand why the mini DST produced water while the standard MDT recovered 20% live oil from the same sand interval.

MDT pressure readings taken over Sand 3 indicate that it appears to be lying on the same oil pressure gradient as the main Sea Lion fan in well 14/10-2, indicating the potential for good lateral communication. Further wells and technical work will be required to determine if this is the case.

Log interpretation has proven to be complex and the Company believes that further work is required to fully understand what has been encountered in the well and its implications.

The Company believes that the lowest sand (Sand 4) could form the downdip, distal part of the S2 feature and will now undertake further analysis to determine the likelihood of oil being present updip in the S2 lobe. Despite the high levels of water saturation in Sand 4, oil staining was observed in the core.

Further technical work will also now be undertaken to determine the likelihood of oil being present elsewhere in the northern Sea Lion lobe and the likely contribution, if any, of this well to any commercial oil development on the Sea Lion feature.

As the regional overlying seal appears to be intact and effective at the well location, reservoir quality is good, oil shows and moveable live oil are present, the main technical risk associated with the northern Sea Lion lobe remains the effectiveness of the seal at the location of the feeder channel and the risk of effective charge from the south if there is discontinuity within the reservoir.

Following completion of all logging operations the Company currently intends to plug and abandon the well in line with the originally intended drilling programme.

The Ocean Guardian drilling unit will then drill appraisal well 14/10-4, which is located 2.3 km north west of the 14-10-2 Sea Lion discovery well. A further announcement will be issued on the spudding of 14/10-4.

Sam Moody, Chief Executive of Rockhopper, commented:

"This well, which was the first to be drilled in this area, 8 km to the north west of the Sea Lion discovery, was encouraging. The results of the well are complex and will take some time for us to interpret fully. The quality sands encountered confirm our understanding of the depositional system within the basin. We are particularly pleased to have encountered a thick sequence of reservoir as we prognosed and obtained a number of samples of live oil. The results are indicative of significant upside potential elsewhere across the Sea Lion and S2 features.

This well is the first of a number we plan to drill during 2011, focusing largely on delineating the extent and size of the Sea Lion discovery, as well as testing additional exploration upside."

To me drop is temporary......this has to rebound strongly.....I'm convinced that it will...

Unchanged buy rating and unchanged 500p target price from FD - quite a decent summary of what on many points was good news for such a bold exploration well.

http://www.fox-davies.com/media/325569/fdcrockhopperfeb112011.pdf

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Good couple of posts on III - now if they do more work and find the most likely reason for the water influx on the second test is indeed water coming from S2 sand due to the packer and not water from the S3 - this could be the opposite of DES, in that water saturation figure will be reduced for S3 and S3 will be declared a 7.3M net pay oil discovery and confirm it is an extension of Sea Lion Main S1 fan from the discovery well.

:) Interesting times ahead while these cores are studied and the results studied more.



So close!! marlonmonkey 13

Credit to M74 for spotting the obvious it's just taken me 9 hours to see it. Who knows the cut off points that allow it to be called an Oil discovery?

Vshale 40%
Porosity 10%

And Sw 60%

OUCH OUCH!! Figure 8 in the CPR for those who don't believe me.

Sw in sand has an Sw of 63%, it is the difference between our OIL DISCOVERY RNS and the one we just got. That's close and probably fixable, bet it's what they spent the last couple of days trying to work out.

Imagine OIL DISCOVERY 7.5m net pay pressure gradients show likely addition to original discovery.....for 3% Sw. DARN!

Good spot M74


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Re: So close!! Stu255 13

Marlon,

Thats what the DST was for but it somehow went against them. I have two theories on why it produced water from a sand that sampled 20% live oil.

FWIW, there is every chance the MDT Sw figures will change +/- 5% once the samples are in Llandudno.

This well has proven everything I wanted it to. Sea Lion can and does reach this far North, someone needs to map the areal topography for the sand 3 depth.

S2 looks to be an oil bearing reservoir.

This well has now dictated the 2011 schedule, and there is plenty to go at including an S2 exploration well and likely an S2 appraisal. There are 3 or 4 more Sea Lion appraisals after 14/10-4, a well for ARG and a spare well or two.

Also I dont like siting a well to try and test two overlapping targets. It just results in compromise and total reliance on sensors.

I think there is a good chance the DST top packer was set in the second sand and they had crossflow from sand 2 to sand 3, hence the pure water production.

Unlucky to have such a thin clay (4m) in which to set the packer. Although this is just a thought.

Plenty of wells the world over produce oil at >95% Sw. As Marina says this was a gnats chuff within a discovery. But thats just an indication of how near the Sea Lion Discovery Zone actually extends to this well.

Migration is like an ink blot. They stepped out 8km... If they werent trying to target two prospects they might have only stepped out 7.5km and this would have been the P1 fantasy so many were looking for.

OG is getting an ever better tool box... cores... DST... the next well will be cored and unloaded. Hopefully there will be two DST's on 14/10-4 main fan and lower.

Then wax lyrical about the pending well test with ESP.

Cannot believe the sp is sub Ernest.

The well has proven every intended goal, but fallen short of the publishable results criteria by 3 drops of water. A figure which will change in the lab.

Wanted 5m got 7.3m.

The sp midway though drilling the next well will be probably around 350p.....mid march.....I would not be surprised to see a buying spree on monday morning....and the graph will have the appearance of the grand canyon !.

Canaccord

Rockhopper Exploration plc (RKH : AIM): So close -- BUY, target 494p
Rockhopper Exploration plc

RKH : AIM : 278p | 717.0M | Buy, 494p

So close -- BUY, target 494p
Richard Slape, 44.20.7050.6643

Plenty of encouragement but not much oil

Rockhopper has announced the results of well 14/10-3 offshore the Falkland Islands. It encountered good quality reservoir at a depth from 2,425 metres to 2,535 metres in a sequence of four main sandstone intervals. Within these, 64 metres of gross reservoir sand was encountered with net sand of 54 metres.

Given that reservoir quality is regarded as a significant risk in the area, Rockhopper said it was pleased to have encountered a thick sequence of sand with average porosity of 18-20% and peaks of up to 25%. Unfortunately, samples from the first, second and fourth sands contained only water.

Samples recovered from the third sand contained approximately 20% live oil that appears to be of medium gravity. Furthermore, pressure readings taken from this interval indicate that it is lying on the same oil pressure gradient as the main Sea Lion fan in well 14/10-2. However, when Rockhopper performed a mini Drill Stem Test (DST) on this horizon, it produced only water into the well.

Only the upper end of the resources range should be affected

The result of 14/10-3 is disappointing but investors should not forget that it was an exploration well located 8 kilometres from the Sea Lion discovery. So, while it now seems unlikely that the upper end of the previous range of resource estimates (669 mmbbl on a P10 basis) for the field will be realised, we do not think this will have an adverse impact on earlier P50 resource estimates.

Disappointment creates a buying opportunity

Assuming it contains reserves 170 mmbbl, we estimate the Sea Lion oil field is worth equivalent of 402p per Rockhopper share when allied to an oil price of US$70/barrel flat real and a 12% discount rate. Adding an estimated 92p/share of net cash increases the total to 494p, which is our target.

We reiterate our BUY rating.

From the FT's sector watcher:

..................The failure of the most recent Sea Lion appraisal well is not quite the disaster that the RKH share price reaction implies. Friday afternoon's announcement that 14/10-3, an 8-km stepout, had only encountered oil shows in one of four zones led to a 17% fall in the share price to 278p/share, an eight-month low, and 45% below last year's high. Our core NAV for Sea Lion is 402p/share, with a further 92p/share of cash, giving a total of 494p. Moreover if we assume an oil price of $85/barrel rather than $70, we get to a total NAV of around 630p/share. With the shares trading at less than half of this, the market seems to be taking the view that even the base case of 170m barrels of oil is under threat.

This seems harsh given that a CPR conservatively estimated those reserves, with an upside of 242m barrels based on drilling to date. I suspect a bigger factor in the fall has been a recent general waning of enthusiasm for the E&P sector following a series of exploration disappointments - DES, HOIL, GPX, PMO, NPE etc. Moreover one of the other big drivers for the sector last year was a rising oil price, whilst with Brent currently trading close to $100/barrel, the upside looks limited. The next RKH well is 2.3 kilometre step-out appraisal, also containing some risk, which should complete next month. Thereafter we expect to see at least three low-risk appraisal/development wells on Sea Lion that should prove up commerciality. By the end of the year I therefore think it is reasonable to expect a share price in the 500-700p range, hence I'd consider current levels an extremely attractive entry point............

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ditto - good post proselenes

http://www.offshore-mag.com/index/article-display/2367306901/articles/offshore/drilling-completion/latin-america/20110/February/sea-lion_delivers.html


Sea Lion delivers further oil off Falklands


Published: Feb 14, 2011

Offshore staff

PORT STANLEY, Falkland Islands -- Rockhopper Exploration has proven further oil close to last years Sea Lion discovery in the offshore North Falkland basin.


The 14/10-3 well was drilled by the Ocean Guardian to a TD of 2,830 m (9,285 ft) in license PL032, 8 km (4.9 mi) northwest of the discovery well. It was designed to explore the northern lobe of the Sea Lion fan feature, and is also the first well drilled in that area.


It encountered good-quality reservoir from 2,425-2,535 m (7,956-8,317 ft) within a sequence of four main sandstone intervals, including 64 m (210 ft) of gross reservoir sand with net sand of 54 m, or 177 ft (a net to gross ratio of 84%).


Rockhopper says wireline log interpretation was performed using Resistivity of formation water (Rw) drawn from downhole Modular Formation Dynamic Tester (MDT) water samples from each sand.


Logs indicate that sands 1, 2, and 4 have high water saturations with hydrocarbon shows during drilling and in cores, while Sand 3 has net pay of 7.3 m (24 ft) using a cut off of 70% water saturation (Sw).


The reservoir lies beneath a thick regional shale seal. Sands appear to be of good quality, with average porosity of 18-20% and peaks of up to 25%. Rockhopper believes that sands 1-3 are likely related to part of the main Sea Lion feature, while Sand 4 could be related to the S2 feature.


Oil and gas shows were detected throughout the reservoir intervals. Four conventional cores were cut through the reservoir totalling 101 m (331 ft), with bleeding of live oil and oil staining observed throughout. However, MDT samples on sands 1, 2, and 4 returned water.


Rockhopper adds that samples recovered from Sand 3, using a standard MDT tool, contained 20% live oil, thought to be of medium gravity.


During a subsequent DST on Sand 3, using a dual-packer MDT tool downhole, water was produced into the well. Further studies will be needed to determine why the mini DST produced water while the standard MDT recovered 20% live oil from the same sand interval.


MDT pressure readings taken over Sand 3 suggest it is lying on the same oil pressure gradient as the main Sea Lion fan in well 14/10-2, indicating potential for good lateral communication. Further drilling should reveal whether this is the case.


Rockhopper believes that the lowest sand (Sand 4) could form the downdip, distal part of the S2 feature, and plans further analysis to determine whether oil is present updip in the S2 lobe.


It will also investigate the likelihood of oil being present elsewhere in the northern Sea Lion lobe and the likely contribution of this latest well to any commercial oil development of Sea Lion.


The regional overlying seal seems to be intact and effective at the well location. With reservoir quality good, and oil shows and moveable live oil present, the main technical risks associated with the northern Sea Lion lobe are the effectiveness of the seal at the location of the feeder channel and the possibility of effective charge from the south if there is discontinuity within the reservoir.


The Ocean Guardian will next drill appraisal well 14/10-4, 2.3 km (1.4 mi) northwest of the discovery well. A further announcement will be issued on the spudding of 14/10-4.


02/14/2011

Lots of shorters this week, this is the up to date chart as of close on 14th Feb - a big jump in shorts on RKH yesterday, to the tune of nearly 500K volume shorted yesterday.

Shorts will apply pressure this week and next and hope to close out with a profit before the appraisal spud news.

Buying opportunity thanks to shorters keeping the price down.




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I keep on repeating this : but the sp just has to rise......if anybody had told me that the sp would be at these levels when it was hovering around 500p, I would never had believed you...far too low now....