http://www.falklands-oil.com/

http://www.rockhopperexploration.co.uk

http://www.argosresources.com/




Rockhopper was established in 2004 with a strategy to invest in and undertake an offshore oil exploration programme in the North Falkland Basin. It was floated on AIM in August 2005. Rockhopper was the first company to make a commercial oil discovery in the Falklands. Today Rockhopper is the largest acreage holder in the North Falkland Basin, with interests in the Greater Mediterranean region.

http://www.fox-davies.com/media/181949/fdcrockhopperaug182010.pdf

Fox Davies flash note Still a Buy

marky is their tp of 350p before or after the flow test results?

The value here is about size, not about flow rates. All it needs is to prove it flows ok, say 1000 bopd or more per day, and its declared commercial with trumpets and sounds and a big rerating of the share price.

350p ahead of flow tests and should be 750p after flow tests (that is without any upgrades).

Upgrades means higher prices :)...... bring it on.

Hal, the 3.50 target price is purely based on the 242 mill barrels they have once a successful flow test has been carried out it will be re rated on their finds.

Pro i would like to see a lot better than a 1,000 bopd more like 5,000 bopd.

markymar, if you talk about 5000 and then its 2000 then you will have the idiots posting all sorts of nonsense.

Better post 1000 expected and let them have 5000 actual..... shuts the idiots up ;)

LOL

marky does 5000bopd make it commercially viable (bearing in mind the location) we were looking for quite a bit more?

5000 bopd is more than enough to be commercially viable, its well above the bottom line for commerciality.

Hal the location is not a problem the API was bang on and i dont see why she wont flow more than 5,000 bopd.

Am very up beat on the Sea Lion flow test i dont think there will be any problems at all, but will stick my neck out and think it will be upgraded to 400 to 700 million barrels.

Broker snap: Rockhopper fall a buying opportunityDate: Wednesday 18 Aug 2010

LONDON (ShareCast) - A year ago the share price of Rockhopper Explorationwas languishing in the mid-thirties, and now it is trading close to 300p, even after the setback of finding no oil at the Ernest well, but Westhouse Securities thinks it has further to go.

The broker, which specialises in resource stocks, has cut its target price to 617p after what it termed a disappointing result at Ernest for Rockhopper, but that still represents a target that is double the current share price.

This mornings weakness should be viewed as a buying opportunity, the broker argues, adding that its share price valuation and target price for Rockhopper is largely underpinned by the Sea Lion discovery, which will be the subject of imminent testing

Guys can you make this simple for me plz... Can you give likely share price range for following scenarios:

1) Say 242m estimate stays same after flow test which shows production of c1000bopd

2) Say 242m estaimte stays same but production is c5000bopd

3) Say 242m estaimte is increase to 500m and production is c5000bopd

lol...my Landline failed late yesterday afternoon so was unable to take advantage of the quick drop in DES/RKH....borrowed someones Else's computer for a quick look around 11 this morning and then went muttering on a bike ride with the kids along the River and thankfully back online now. Very frustrating!

Pros / Markymar .. could you please give likely share price range for following scenarios:

1) Say 242m estimate stays same after flow test which shows production of c1000bopd

2) Say 242m estaimte stays same but production is c5000bopd

3) Say 242m estaimte is increase to 500m and production is c5000bopd

Cheers

Gildph its the size of the field which will give you a price of what the share should be worth so i would not get hung up on bopd.Its Medium grade oil they found, it should flow fine.

http://www.rockhopperexploration.co.uk/pdf/RKH_Prelims_Final.pdf

FOR THE YEAR ENDED 31 MARCH 2010

The discovery on the Sea Lion prospect has transformed the value proposition represented by the group. A pure
exploration play, such as Rockhopper when it began, creates value through a number of discrete steps, each with its
own set of risks and rewards, as it goes through the process of proving reserves then moving forward to production.
In chronological order, we see the key value points for the group as being:
The winning of the exploration licences,
The making of the first discovery on those licences,
The testing of the discovery well to give an indication of its commercial potential,
Confirmation of the size of the discovery for scoping development plans as well as the full exploration of the
acreage,
Completion of the field development plan, and
First oil and subsequent production.
The first value point, the winning of the exploration licences, was achieved in the earliest days of the group. In 2004 we
were awarded licences PL023 & PL024, in the south of the basin, and in 2005 we farmed into Desire Petroleum
(Desire) licences PL003 and PL004 and were awarded PL032 & PL033, the former Shell acreage in the north of the
basin that contains the Sea Lion discovery.

The second value point, the making of the first discovery, took until 6 May 2010 when we announced the results of well
14/10-2 on the Sea Lion prospect. This discovery was the result of a great deal of rigorous technical work undertaken
over the years since 2004 which enabled us to be drill ready by the start of the year under review and in a position to
act on the opportunity to be part of the 2010 drilling programme initiated by Desire, our neighbouring licence holder
and partner in PL003 & PL004.
Prior to drilling, RPS Energy (RPS) had provided an independent review of the possible size of the Sea Lion prospect,
attributing it with a best estimate of 170 million barrels recoverable. At 170 million barrels recoverable, RPS had
calculated a net present value, at $80 per barrel and applying a 10% discount rate, for the prospect of $2.5 billion.
Following the drilling, the best estimate was increased by RPS to 242 million barrels recoverable, indicating that there
could be significant upside still to be realised.
We spudded well 26/6-1 on the Ernest prospect on 23 July 2010 and declared it to be a dry hole on 17 August 2010.
The well was drilled approximately 120 kilometres from the Sea Lion discovery in a previously undrilled part of
the basin to test a different play type from that of Sea Lion. The well encountered good quality sands with high
porosity and permeability and we intend to undertake detailed studies of all the data gathered.
We are fully funded to complete the well on the Ernest prospect, the initial flow test on the Sea Lion prospect, which we
believe will help move the discovery forward towards being declared as commercial, and pay our 15% contribution to
two further wells on PL003 & PL004, where Desire is the operator.
With the current programme funded and underway, we have therefore turned our planning focus to the fourth value
point, confirmation of the size of the Sea Lion Field. This will require appraisal of the discovery on Sea Lion and to
deliver this we see three distinct work streams, being technical, corporate and financial.
In technical terms, we need to establish the number and location of appraisal wells required on the Sea Lion prospect.
We also need to revisit our prospect inventory in light of the new data from the recent wells to establish where we
would like to drill further exploration wells and whether, and if so where, additional 3D seismic should be shot.
In corporate terms, I am delighted to report that at the executive level Dave Bodecott, our exploration director,
and Peter Dixon-Clarke, our finance director, are both now full time employees. At the non-executive level we
will look for two additional non-executives thereby bringing the total number of directors to eight and creating
the balance between executive and non-executive that the Combined Code requires for good governance.
In financial terms, once we have an agreed work programme for the next phase, we will be in a position to cost it and
consider how best to finance it. As part of this planning, we are undertaking a review of our advisers and considering
whether we should remain on the Alternative Investment Market (AIM) or move up to the Main Market of the London
Stock Exchange, a decision we will take when it is right for the group.
The fifth value point, the completion of a field development plan, cannot be concluded until the discovery is appraised
and confirmed as to its size, but the research and planning as to how best to deliver this has already been started.
CONCLUSION
In conclusion, the group has been transformed by the discovery on the Sea Lion prospect and is now working
through the steps required to ensure that you, as shareholders, get the best possible value from it.
The discovery has been the result of over six years of hard work and I would like to thank my board, the
consultants we have engaged, the Falkland Islands Government and you, as shareholders, for investing both
time and money in this success.
DR PIERRE JUNGELS CBE
CHAIRMAN
17 August 2010

Thanks Markymar - do agree with price of c 7.50 per share if 242 estimate left as is assuming flow test doesn't throw a spanner in the works?

marky you are right in saying the size of the field is important but surely what can be recovered is far more important and at what cost? Say one compares AFR with RKH ....AFR has a market cap of around 900m and we are led to believe should be producing 40000 bopd by year end 2010, whereas RKH has a market cap of 600m approx and is unlikely to produce any oil before 2012 and you estimate even then it might be only 5000 bopd, they have to produce at least 20000 bopd to make extraction worthwhile in this location. Either AFR is grossly undervalued or RKH has to produce a flow test much greater than you suggest.

Proselenes,

I never take much notice of Brokers. How can I when on a broker recommendation list that I receive daily, I often see a Buy/Sell/Hold recommendations from different brokers for the same company. Today 1 broker recommends buy Rockhopper the other recommends sell.

Marky,

I agree the size of the field matters, IE same amount of oil in a widely spread field would be worth less than a concentrated field, also on the ease of production flow, plus many more factors. But I agree with Halifax that the main value factor is mainly put on bopd.

It's not just bopd. It's when the field can be brought into production and then it's cost per barrel to extract, and the margin per barrel (which depends on the oil price).

Barrels of oil per day does matter the higher the better and there are many methods to accelerate the flow of oil.

Desire has medium grade oil and it should flow well.

What I was pointing out was that at this stage when the brokers try to put a price on what RKH are worth they go by the field sizes at the moment not how many barrels it will flow as they dont know that, one of the reason you have a flow test.

After a flow test they have more figures to play with and only then can they re rate RKH.