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.

Its worth highlighting the AGM post, which is worth reading in total as well as the part I have highlighted. It is very likely that MAYBE RPS have allowed in part for this in the June 2010 CPR BUT NOW, MAYBE, they would not rely on the existing 2D and MAYBE they would demand new 3D before they would allow for it.




Hi Folks,

As stated earlier see RNS for details of the statutory parts of the AGM and the Resolutions passed.

The following is from the questions and answer session held after presentations from Dr. Pierre Jungels and Sam Moody. And in addition to Dattani Pick and Invest4Values excellent overviews of the AGM see below.

Disclaimer: the questions and answers are from my own notes and contain no direct quotes. Where I have put xxxx xxx is my scrawled notes of a quote and not to be taken as literal but recounted to the best of my knowledge. Anything in brackets is my thoughts or how I interpreted the context of what the speakers were saying and body language etc... Also I have put a couple of the answers together as they were basically referring to the same thing re the OG.

PJ: Dr. Pierre Jungels
SM: Sam Moody
DB: Dave Bodecott


1) Will the BOD consider splitting the shares if the price per share gets too high?

PJ: No share split is envisaged at this stage it is not something that the board has even considered (and wont for some time yet).


2) Permeability after the original SL update RNS which stated the permeability - there has been no further news regarding updated permeability after the well test. Also, is there further information on the duration of the pressure build-up when shutting the well, during the recent test?

DB: The BOD has a preliminary report on the well test but the full information has not yet been processed fully (assuming RPS).


3) Are the Board concerned by the wax content of the oil?

SM: No concerns at all about the wax content of the oil samples. The wax content was an issue during the well test for a couple of reasons lack of proper equipment being procured and shipping to the FI in time for the well test. SM also added that the well flowed for 18 hours {uninterrupted?} this was much better than anticipated. He went on to say that the wax content would not be an issue in a specifically designed production/appraisal well as the correct equipment/preparation would be in place.


4) Rig Saftey are the BOD concerned about safety given the recent GoM disaster?

PJ: Hundreds of thousands of wells have been drilled across the world over many years and 99.99% do not have a problem. The GoM disaster was a one off event due to the huge gas pressures and quantities of oil involved. RKH has submitted its EIA and it is important to note that the FI Gov. has the same laws/regs re oil exploration/drilling as the UK Gov.

5) Farm in Would pressure from Argentina or other SA countries threaten RKHs potential to find a farm in partner, due to other SA interests (current or future) for said company?

That would be up to the oil majors themselves to work out which was the better potential avenue to go down. But a farm in is only one of a number of different options available to us as we progress.
(someone mentioned BHP Billinton) PJ: We dont know what BHPs situation is regarding FOGL (apart from what was in the RNS), but remember that BHP is a major in mining, not oil.


6) What does the Board see as the biggest risk for RKH moving forward?

PJ: The single biggest fear is that funding for appraisal wells and future exploration wells will not be available due to a downturn in the financial markets.


7) Will there be a new CPR? (apologies not full question)

An updated CPR has been commissioned and is being worked on as we speak.
PJ: We can not hurry them, it will take as long as it takes, us harassing them will not make it come any quicker.
SM: (to a ripple of unsure laughter) It will be this year!


8) Ocean Guardian any chance that RKH will have it back at some point in the current 10 well campaign?

SM: Desire have the right to use the 2 slots which are currently unallocated. BUT I am confident that DES would be more than amenable to us using one of these slots.
PJ: We are currently talking about the possibility of the OG staying in the FI after this 10 well campaign.
(I think PJ said something like lets hope Rachels a success then but it wasnt into the mic so cant be sure)


9) Is it the Boards intention to take Sea Lion and/or other future finds to the production stage?

PJ: (Refers to the screen which had had the slide showing the potential exploration to production value of a random oil company on it this will be on website shortly) The board fully intends to create maximum value for shareholders (my sincere thoughts from this is that was a YES!)


10) Why is Chatham is not being declared an oil discovery from the 1998 Shell well which recovered a 2 litre sample of 27.1 API oil from the wireline tools and was reported to have unexpectedly flowed oil to the surface during drilling?

DB: We (RPS) are currently working to re-evaluate all sand systems, basin wide. (pressed further) It gives me a warm feeling inside knowing what the potential is in the basin (I think hes very pleased with what hes seen - given the smile!)


11) In the first RNS after the flow-test, Dr. Jungels said that RKH believe that Sea Lion is the largest fan sandstone body in the North Falklands Basin. What data or information is it that has led him to this assumption? Will that statement be backed up in an updated CPR or RNS in the near future?

PJ: RPS working on updated CPR This is a RKH internal view. We have data from all across the basin we still believe in the statement (and theyre still saying it).
PJ: (rather cheekily) You would have to ask the DES board if they agreed with that (smug reference to the DES RNS that stated that they have more than 50% of the fan sandstone plays???)

12) Missed question but re value from our 7.5% stake in DES acreage.

PJ: We pay the % of the costs for drilling everything i.e. appraisals/ exp wells. But we get 7.5% of all revenues generated from these 2 licences be it from sale or production.


13) If another FI explorer made a discovery, would it slow down potential developments with port facilities/rig etc?

SM: There are limited berthing and port facilities at Port Stanley, but it is excellently run and could support more than one rig. (very interesting he sounded confident of this one)


14) Is Argentina (+SA friends) going to be a threat to the future of FI oil industry from a logistics point of view?

SM: No There are a number of small British exploration companies operating in the FI. They now have an oil discovery and great potential for future development. All this has been done without any help from Argentina.


15) Johnson Gas Discovery will it be brought to production?

PJ: This is not a priority at the moment the priority is oil and SL. We will need 5tcf before it is commercial and it would require either a FLNG/LNG plant on the island neither of which are considered at the moment. But it remains a viable option for the future.


16) Does RKH have enough staff?

DB: I sat down the other day and listed 24 people that we have been working with - each of them experts in their fields The beauty of getting consultants in is you can use them when you need them, but then let them go and get on with something else.


17) What indications do the current 2D seismic give on the extent of Sea Lion south of the 3D cut-off line? (And has this been included into the calculations for the current Sea Lion volumes?) Also, does the board have plans in place for which new 3D seismic areas are being surveyed and why?

There is a 14km gap south of the current 3D seismic cut off line to the edge of the licence. There is a strong (already sorted if you ask me) possibility of acquiring new 3D seismic to fill this gap. This could well (is) in conjunction with other operators in the NFB. RPS have looked at the 2D that was shot over this area and have concluded that SL could extend to a maximum of 100km2 this would be confirmed with any new 3D shot over the area.


17) Re: Ernest: Does the Board know what the likely cause of the CSEM anomalies were? And do you think the prospects for Southern North Basin are now significantly higher risk?

DB: No data is still being analysed. no idea. One thing to note is that initial data has shown extremely good reservoir quality and also to remember that this was a feature of a lot of North Sea fields that were drilled at the beginning. We are definitely not righting off 23 +24 at all



As an aside SM also mentioned the P90 recovery rate of 15% before the Q&A session he (almost laughed) said that RKH believe that this is very very conservative and the actual recovery rate will be much higher. (My favorite bit of the day)

Long live the Rock, and all who sail in her

Smicer

yesterday afternoon I posted about a sindicate shorting, someone else " galileo1 46" at - iii - later on the day came with the same conclution ...........

re - Master RSI - 13 Oct 2010 16:12 - 3234 of 3259
It is pointing that there is a sindicate shorting the stock every so often, on todays trading pattern

galileo1 46

A) WE ARE APPROACHING TARGET DEPTH, NOT THERE YET DUE TO 2 DAYS OF PROBLEMS.

B) THE SELL OFF YESTERDAY AFTERNOON WAS A CYNICAL ATTEMPT BY SOMEONE TO ACTIVATE STOP LOSSES ETC AND THEY KNEW IT WOULD WORK AS RKH WAS DOWN 17% AND DES ONLY 7%, THE FEAR WAS ALREADY THERE.

C) THE SELL OFF WAS COMPOUNDED AT AROUND 4PM AS THIS IS THE TIME SPREAD BET FIRMS MAKE THEIR MARGIN CALLS, AND WITH THE STOCK DOWN AROUND 12% AT THE TIME MANY PEOPLE COULDNT MEET THEM WHICH IS WHY THE RECOVERY STALLED.

D) SOME PEOPLE HAVE BEEN MUGGED ON THE BACK OF THESE RUMOURS, NOBODY KNOWS THE RESULT YET! IMO. G1

"THE SELL OFF WAS COMPOUNDED AT AROUND 4PM AS THIS IS THE TIME SPREAD BET FIRMS MAKE THEIR MARGIN CALLS" - I don't think so.

Say suppose there is another late sell-off.

skinny

re - I don't think so.

Sure you could do better than that and give a reason why not.

Spread bet firms issue margin calls as and when - not at 4pm.

There was a couple of newspaper comments this morning ..........

DES - SMALL COMPANIES ROUNDUP

The negative fall-out from Rockhoppers operational update weighed on Desire Petroleum

Thursday October 14,2010 --By Daily Express Reporter

THE negative fall-out from Rockhoppers operational update weighed on fellow Falklands oil company Desire Petroleum, down 31p to 132p, although some traders suggested that bad news could be in the pipeline from Desires Rachel prospect.
http://www.express.co.uk/posts/view/205241/Small-companies-roundup

RKH -- Market report - daily Mail

Another rollercoaster day for Falkland Island oil explorer Rockhopper, which has seen its shares rocket since striking black gold in May. The stock shed more than a fifth of its value on doubts about the depth and volume of its Sea Lion well, ending 97p off at 363p.

http://www.dailymail.co.uk/money/article-1320298/MARKET-REPORT-Is-Best-Buy-stalking-Kesa.html#ixzz12JRbZ5fa

Some good info here :

http://siliconinvestor.advfn.com/readmsg.aspx?msgid=26884726


Context for the Rockhopper beatdown today:

Disclaimer: This document is general market commentary and does not constitute a research report. This document is prepared by Canaccord Genuitys Institutional Sales for informational purposes only.


I saw Sam Moody CEO of Rockhopper this morning - I think today's move is a great BUYING opportunity.


The Chronological Order of Events

Pre drilling the CPR estimate by RPS was 170m barrels (P50)
The P90 - P10 range is 57m barrels to 670m barrels!
Post drilling all agreed there was more oil than expected so RPS upgrades estimate to 242m barrels
The stock rallies to 500p plus
We upgrade our target price to 641p - our valuation of Sealion (622p) & cash (19p)
Work continues on identifying the first appraisal well using Geo-physical data - designed to be pessimistic to eliminate 9 of the 10 potential sites for this well.
A potential capital raise required a confirmation of the CPR
The only 'new' data was the Geo-physical report - so this was made available to the CP
This is interpreted by the CPR as 'negative' and the estimate reduced to 170m barrels
As the company had that information it has to be released to the market
So today the stock is back 20% to 380p!



What has changed?

Only the CPR estimate!
There is NO new seismic data
There is NO new test data
Nothing has changed with the flow data.
The CPR is estimating the size of a 50km square oil field from the results from one well - this is clearly a near impossible task and has to be approached conservatively.
What happens now?

The results of the Rachel well (7.5% RKH) are due at the end of October.
A seismic testing ship will arrive this December - to be joined by a second ship in early 2011.
Seismic testing will take 3 months with a further 2-3 months of interpretation.
The rig for the appraisal well will arrive at the earliest at the end of January 2011.
Drilling could commence in February 2011
Valuation

On the basis of 170m barrels we value Rockhopper at 545p
This consists of 526p for Sealion Plus 19p of cash
This give 40%+ upside from 380p!
This assumes nothing from Rachel
This assumes no more positive data from the 3+ appraisal wells on Sealion
This assumes nothing from the 5 other prospects RKH has in the region.
Today there has been some disappointing news for Rockhopper - the price is now reflecting ONLY disappointing news - the weight of probabilities is tipping in our favour!

Interesting we now have confirmation the CPR was based only on 50 sq/km and not the full potential 100 sq/km.

Thats nice to know !!

skinny

re - "THE SELL OFF WAS COMPOUNDED AT AROUND 4PM"

That comment was from "galileo1" and looking at Intraday chart shows it was 3pm that took place, so I wonder if the person was giving GMT or European Time ( they are 1 hour ahead).

I must say all the Falkland Island shares fell heavilly at 3pm

I'm only disputing that it was compounded by spread betting companies issueing margin calls at 4 or 3pm. They issue margin calls whenever necessary - not at one time every day.

no fun biting the bullet (again!), but a damn sight better than allowing losses to run away

cynic probably a shrewd move, there has been too much blogging hype it reminds us of TMC a couple of years ago (where is lex1000 now?) which spectacularly crashed to earth from over 5 per share to 15p.

i still hold, but am wondering whether to reduce still further, though at least there is some modest comfort in being short of FOGL

His a tax exile after selling at 5

Guys....all you need now is a well informed broker or two to give an upgrade and the stock will recover.

rf broker recommendation "kiss of death"!

A bit like the investors chronicle tips at one time...they were like a curse tipping stocks a few years ago.

Guys....all you need now is a well informed broker or two to give an upgrade and the stock will recover.

All explorers have one good bull run. After that. they only very rarely recover.

A rebound will come...it's risky...but that's the nature of the game.....oil has been found and if there is some, then there has to be more....somewhere.