.

Two and a half weeks to go then.

This ongoing exploration drill does have the potential to be a "game changer". Whilst we can all appreciate its outside the defined discovery area of Sea Lion, should it come in with success it expands Sea Lion into being a potential "Billion recoverable barrel" size.

That is a game changer and one which will have serious repercussions for the Falkland Islands as well as Rockhopper (RKH) (and to a lessor extent Argos (ARG))

Worth noting this from Spiegel in 2004, one wonder how quick they will try to move in, in this respect I am glad Rockhopper now has 250 million cash, to protect against the oil majors trying to push their way in with poor priced bids or farm in attempts. :

http://www.spiegel.de/international/spiegel/0,1518,334165,00.html

"...........The Falkland Islands deposits aren't even mentioned in the lists of known oil reserves kept by the oil giants Shell, BP and Exxon. These multinationals, known in industry parlance as the majors, already have their hands full in regions such as West Africa, the Brazilian coastal waters and the Caspian Sea. Until now, searching for black gold in the rough and deep seas (up to 10,000 feet) of the South Atlantic seemed too complex and expensive, as well as being a highly speculative proposition. It's a risk the major corporations prefer to hand over to smaller oil exploration outfits. After all, if the venture turns out to be unsuccessful, the majors won't have incurred any costs. But if the prospectors make a strike, they'll be quick to move in.

Perhaps 10 to 14 days to news now.

I expect the BS rumour mill will start cranking into gear now as the short term pump and dumpers start trying to spike the price, along with shorters who want the price to spike before putting shorts on for results.

Therefore expect lots of nonsense across the other internet BB's about 7" liner, coring, oil shows, people talking in bars, gas kicks etc...

Do not get sucked into it IMO, either buy and hold for results, or do not buy and wait and see - don't let the pump and dump rumour crews suck people in is my view. Going to be lots of false rumours spread around in the coming days/weeks.

Nothing exciting, just the price rebounding a little as it was becoming oversold imo.

At this stage they could, if there has been no hold ups, now be drilling into Sea Lion main fan, there are perhaps 4 other targets to TD (Sea Lion Lower, S2 and also identified seismic events).

So, given they could now be into Sea Lion upper main fan, one should expect the rumour mill to go into overdrive very soon.

From my post early on this morning at ADFN :




Sea Lion Main fan +
Teardrop (Sea Lion Lower ? ) +
S2 +
Perhaps 2 to 4 more fans from S2 to TD.

Next week ?


http://www.proactiveinvestors.co.uk/companies/news/25026/rockhopper-explorations-new-sea-lion-well-nears-target-horizons--25026.html


Rockhopper Explorations new Sea Lion well nears target

Friday, January 28, 2011 by Jamie Ashcroft

Rockhopper Exploration (LON:RKH) may report findings from its latest oil exploration well in the Falkland as early as next week, according to research by Evolution Securities.

David Farrell, oil and gas analyst at Evolution, reckons the new Sea Lion well could potentially reach its two target horizons at some stage over the weekend.

Rockhopper spudded the 14/10-3 exploration well 8 kilometres north west of the Sea Lion discovery on 13 January. This new well is testing a previously undrilled northern lobe of the Sea Lion fan system, outside the Sea Lion Discovery Area about 8 kilometres away from the original discovery well.

Looking back at previous drilling rates in the North Falkland Basin suggests that Rockhopper may potentially be reaching the two target horizons of its current 14/10-3 well at some stage this weekend, Farrell said.

This means an update from the company may come as early as next week.

The original Sea Lion well put the north Falkland basin on the map as a credible frontier oil play when it struck oil early in May.

Back then Rockhopper set the discoverys recoverable resource estimate at 242 million barrels (mmbbls) of oil, and it also noted the discoverys significant upside potential". In September flow testing on the Sea Lion well returned a rate of around 2,000 barrels of oil per day (boepd) for approximately 18 hours. The test peaked at 2,304 bopd.

Since then however Desire Petroleums (LON:DES) string of unsuccessful exploration wells have dented what was becoming an increasingly compelling oil boom in the south Atlantic.

Now with investor attention firmly fixed on the only confirmed oil discovery in the new frontier, a successful result from the new Sea Lion well could give the Falklands oil story a breath of fresh air.

Indeed Farrell reckons a positive drilling result could add between 200 and 300 pence to Rockhoppers share price - which currently stands at around 360 pence per share. He highlights that the success of a second well could take the Sea Lion resource to 500 million barrels.

Investing prior to well results is obviously very risky however we value the Sea Lion discovery, at 200 million barrels, at 351 pence suggesting there is some decent downside protection, Farrell said.

The analyst adds: If successful, in addition to the direct benefit to Rockhopper, a 500 million barrel field development becomes a much more attractive proposition to an international oil company (IOC) or national oil company (NOC) and should therefore lessen the commercialisation discount applied to all companies in the Falklands.

It is clear that the weeks and months ahead will be crucial for the AIM-listed firms exploring for oil in the north basin - Rockhopper, Desire Petroleum and Argos Resources (LON:ARG).

Alongside Rockhoppers drilling results, these companies are also likely to get a boost from a widespread seismic exploration programme across all three companies' acreage in the basin.

The results of the two separate seismic programmes, using different vessels, are expected early in spring. Work is already underway on the first programme, which partners Rockhopper and Desire. Argos and Rockhopper are partnered for the other seismic programme.

The latest rumour now is that the drill bit is entering the top of the 1st target zone about now, and its a hollow drill bit as they are taking core samples while drilling.

Therefore, drill progress will slow down to perhaps 50 metres per day owing to taking cores.

That means perhaps 10 days of coring if they core all the way down.

But then, its just the latest rumour......

News tomorrow morning ?....possible.....even if it's just to say drilling is going well....

No, would not have thought so. If they are going to be coring (vertical while drilling) then you can understand why they said 38 days for the drill. Vertical coring will really slow the drill bit progress down.

Everyone should expect failure, its an exploration well, this is not an appraisal, its pure exploration.

Therefore, given how low the RKH price is on the actual Sea Lion discovery area, its makes for a great stock to buy and hold (real paid for shares) as you are in effect getting a free shot at 700 million recoverable barrels upside safe in the knowledge the share price is already too low on the existing discovery.

Not a stock to be holding margin positions in (spread bets and CFD) as there are people who will make the price swing and be volatile to collapse your positions, but as always, buy real stock, ignore the short term swings and relax. If it comes in then great, and if not then its on to appraising the actual Sea Lion discovery next drill later this month.

So, no flow testing on this or the next drill. Only coring is to be done on this well and the appraisal well. And then RKH will keep doing appraisals to properly define Sea Lion until later this year.


http://www.falklandnews.com/public/story.cfm?get=5879&amp%3Bsource=3

January 30, 2011
by Phyl Rendell
DIRECTOR OF MINERAL RESOURCES REPORT FOR DECEMBER 2010:


............On completion of Desires well, the rig was taken on contract by Rockhopper Exploration and well 14/10-3 (Sea Lion North) was spudded on 13 January. This is an exploration well due to it being located outside the Discovery Area that has been declared by Rockhopper. It will be followed by an appraisal well that will be drilled in the Discovery Area. Neither of these two wells will be tested while being drilled but cores will be taken from these and subsequent wells for analysis. On completion of Rockhoppers first appraisal well, the rig will revert to Desire Petroleum in order to drill further well on a location yet to be decided. Rockhopper will then continue to drill a series of additional appraisal wells in order to assess the size of the Sea Lion discovery. This is likely to take until late in the year to complete.

Rockhopper Exploration has appointed Mr Neil Booth, an oil industry specialist, to be based in Stanley during offshore drilling activities.


2). 3D Seismic Surveys: The survey vessels Polarcus Nadia and the Polarcus Asima are carrying out 3D seismic surveys for Argos Resources, Desire Petroleum and Rockhopper Exploration in the North Falkland Basin. The vessels have made several port calls for technical reasons and crew changes. There are a number of support vessels accompanying the survey that will be seen in Stanley harbour periodically. Data from these surveys will greatly increase the geological understanding of the basin for future drilling programmes.

Both vessels have Marine Mammal Observers and Passive Acoustic Monitoring Operators on board during surveying. Environmental data collected is being provided to Falklands Conservation.

1st Feb 2011 DES Presentation.

http://www.desireplc.co.uk/images/uploaded/1472131_3252464.pdf

.

Given they are now coring, and might be coring 600 meters or 800 meters it might be a long time to official news.

Coring should mean progress slowed to around 50 meters per day, with a core being retrieved about once daily (50M length).

So official news might be some time away, however, as cores are brought to the surface its very easy for all to see if they have oil in them or not.

From Alphaville, FT Sector Watcher

".............DES is hosting an analyst presentation today, with the slides already available on its website. There doesn't appear to be much new news, other than confirming that the group's next well is likely to be the Ninky prospect in licence PL004 (DES 92.5%, Rockhopper 7.5%). Ninky is believed to be targeting P50 reserves of 94m barrels, which I'd estimate to be worth around 100p/share net to DES.

Given the group's disappointing track record to date in its Falklands drilling campaign (i.e. five wells drilled, zero commercial success), I'd imagine that hopes are not especially high. The well is likely to spud around March/April, i.e. after RKH's next two wells, the first of which is currently drilling. This increasingly looks like the last roll of the dice for DES, given that its 53m of remaining cash will largely be used for the drilling of Ninky and to complete a 3D seismic programme, as well as rig demob costs

If Ninky fails, the group may struggle to raise further cash for future drilling, however compelling the seismic may look.

There are much better ways to play the Falklands, primarily RKH with its Sea Lion discovery, alternatively Borders & Southern or FOGL for exposure to the large structural targets to the south and east (although drilling results from here are unlikely before next year)............"

http://www.subseaworld.com/contracts/titan-torque-secures-falklands-deal-03905.html


Titan Torque secures Falklands deal

2011.02.01 - Contracts

Oilfield equipment specialist Titan Torque Services has secured a six-figure contract to provide support services for exploration work off the Falkland Islands in the South Atlantic.

It has signed a one-year deal with well management company AGR Petroleum Services to provide torquing facilities in support of the operation of the drilling rig Ocean Guardian.

Aberdeen-based Titan Torque is to set up an operational unit in the Falklands to be the focal point of its service delivery.

The Ocean Guardian is working on behalf of Desire Petroleum and Rockhopper Exploration.

This is a very exciting development for us, illustrating our capabilities to deliver for clients on a global basis, says Titan Torque managing director Keith Gaskin.

Our market offerings are based on the principles of creating a safer working environment and increasing rig efficiency. The benefits of our service are increasingly being recognised across our industry.

Bruce Jepp, Titan Torque business development director, said: We are delighted to be supporting a highly-respected company such as AGR and look forward to building a relationship with one of the leading service providers in the global offshore industry.

The contract, valued at approximately 400,000 for the year and featuring extension options, will see Titan equipment shipped to the Falklands later this month and a company team put in place to set up the facility.

Titan will provide torquing services alongside specialist ancillary equipment and customised crane and transportation facilities.

The contract will also involve the deployment of Titans innovative drill bit protector, which facilitates onshore drilling bottomhole assembly and encases the drill bit during transportation offshore, enhancing safety and efficiency during transportation and offshore deployment.

The award is the latest in a series of contract wins for Titan, which has included a three-year deal to support the UK North Sea operations of Premier Oil.

Titans service portfolio is focused upon pre-made drilling assemblies and innovative drill bit protection equipment.

The specially designed Protector saw the company win the Wood Group Award for Innovation at the 2010 Grampian Awards for Business Enterprise.

The company has gone on to develop its Push Pull Unit. The innovation has been specially designed to insert the running tool in a process that is more controlled and measurable than existing industry techniques.

http://www.ft.com/cms/s/0/156ede7a-2e27-11e0-8733-00144feabdc0.html#ixzz1CkQwZD88

.............Rockhopper Exploration added 3.5 per cent to 368p on further speculation of an imminent drilling report from its latest prospect off the coast of the Falkland Islands.............

I think the "no testing while drilling" is deliberate to prevent any DES type leaks. Drill to TD, core along the way and then when TD is hit, then wireline it and log it, and only then will it be known what the results are.


http://www.offshoreenergytoday.com/falkland-islands-director-of-mineral-resources-gives-december-2010-report/


.........On completion of Desires well, the rig was taken on contract by Rockhopper Exploration and well 14/10-3 (Sea Lion North) was spudded on 13 January. This is an exploration well due to it being located outside the Discovery Area that has been declared by Rockhopper. It will be followed by an appraisal well that will be drilled in the Discovery Area. NEITHER OF THESE TWO WELLS WILL BE TESTED WHILE BEING DRILLED but cores will be taken from these and subsequent wells for analysis..............

The biggest thing to watch is, as said many times, VOLUME.

Around 10 million shares traded on 1 day is when something is going on. So look for if volume moves up past 5 million shares traded intraday, that will be an indicator that something might be cooking.

At the moment volume is small and so, nobody presently knows much.

In the waiting period I expect the price to gyrate between 350p and 380p while the short term traders go long and short, trying to scare people or suck them in to get some movement to feed their short term trades.