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.

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.

Sold the remaining DES I had, looks to me like they have drilled the main well and found bugger all, and now they are going to do the sidetrack in a last throw of the dice to find something with this well.

Anyway, who cares now, I have a nice little extra pot ready for a RKH top up :)

Hilary, yes, I would agree explorers who find nothing generally never recover, but those that find oil go from strength to strength.

13 days drilling and you have the result hey ?......a word beginning with b springs to mind !.

Pro thats rubbish as we would have an RNS stating that.

Desire is a buy they are still drilling at present.

The earliest we might get news is this Friday if they are scared it may leak out like it did last time if not news will be Monday or Tuesday. They will shut down communication from the rig when near and as long as I am aware communication is still up and running.

Rachel is right next to Sea Lion,15 km if you are going to find oil its going to be with Rachel and in the fans, the same as Sea Lion.

Its a gamble but a dam good one its not like Ernest the odds are stacked in favour of this been a success.

35 days is drilling through down all the way, running casing and liner, doing logging etc.. and then P&A the well.

Presently DES are about day 17, thats easily long enough to go through 2 of the fans, now if they both are dry or water then there would be no point wasting time and money to go down to original TD. They could stop there and do the sidetrack that was in the original plans as a possible thing to do.

The volume of selling is telling you something is wrong at the moment with the drill....................

marky, well, we shall see.

I have derisked totally out of DES now and will simply buy more RKH on dips for the moment.

DES is now sufficiently low and falling that you can afford to watch from the sidelines and still get on board after any good RNS but avoid all the risk now of the potential for a 2nd failure.