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.

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Oil is going ballistic at the moment.......really incredible.....$100 a barrel almost upon us for WTI,.....$112 for Brent....staggering.....

and yet RKH and XEL are in the toilet!

More all at sea I would say.

Alphaville


NH The 14/10-4 appraisal well currently drilling on the Sea Lion structure has a make-or-break feel about it for RKH, and indeed for the Falklands sub-sector as a whole. Following the recent failure of the previous well (14/10-3), which was a relatively high-risk stepout located 8 kilometres from the discovery well, the shares have taken a pounding, down 40% in a month. However success with the current well, which could reach TD within the next couple of weeks, could easily see the P50 case of 170m barrels of recoverable oil being confirmed, with the potential for an upper case of 242m barrels. The former case would confirm our current NAV of 593p/share, whilst the latter would increase this to around 840p/share. On a risk/return basis, I'd still be buying RKH - the sell-off looks overdone.
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Nice bit of sun in the Valley today Marky...could do with some sunshine on the share price too!

Maybe we need a pint in the sunshine at the Angel soon and put the world to rights Chav!!!! feel there is a big dark cloud following around at the moment.

I feel Summer is coming Marky and the Big dark clouds will disappear...pint sounds good.

If this comes good - as I'm sure it will - I'll buy you both a pint!

Well i keep saying this but would be great to all meet up and have a good piss up and get to know some of the faces.

We are at a low with RKH at moment..can I say XEL for a ramp as pro not posted much..next four weeks is make or break for me I cant be more honest i am down between 30 to 40 % on the year so far, I dare not look at my account.

Hope so chav those clogs have lost that click and spark.

You ain't alone Markymar :-(

Marky
Those that have been in from the start are all feeling the pinch. I bought early (37p) but, buoyed by success, topped up later - and that is my problem. Overall this year I'm down 4.8% on my oilies.

Perhaps at a time when we wouldn't water down the beer with tears of anguish we CAN meet up!

avsec, surely you must have taken a load of profit on RKH, if you bought at 37p??? I can't believe you now have an average price over 4.

Harry

I let it ride sadly in a vainglorious attempt for fortune - pure greed!
My RKH average is 212 currently but FOGL and DES did me no favours!

Looks like we have a little bounce today,level 2 is looking good even XEL on the move,just need the sun to shine now.

Biggest holding in my portfolio......with the original discovery and flow test plus cash, : that surely will underpin the sp, even if the deeper sands have nothing to show the existing discovery to my way of thinking should maintain the sp around this level....or am I wrong to think this way ?.

Still foggy this way marky but a small ray of sunshine on the sp :-)

Sorry to hear that avsec. Not sure those kind of opportunities for big money come round very often. No harm in being greedy, jusy not too greedy!

Much has been said about the campaign in the Falklands and the city seem to have fallen out of love with the idea of a new oil province; maybe understandably given the behaviour of Phipps et al over at DES. Is there still life in this campagn or is the Sealion about to roll over and die?

I value Rockhoppers oil at 6.50 per barrel in the ground; a find of 90mmbl is all we need to justify the current capitalisation of 600m. The most recent CPR illustrates a P50 of 170mmbl (thats a best guess or mean figure). So therefore based on what we now know the SP should be almost 5. That to me means RKH are hugely undervalued and its maybe a bit of a crude way of calculating a valuation, but it seems logical.

I want to add to this crude evaluation model a number of number of extremely bullish indicators which may should point to further upside potential. Firstly the oil discovery at SL2 (14/10-3) found oil some 8km away on the same pressure gradient at 14/10-2.

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. (RNS: 11/02/11)

This current appraisal will use the geological data gleaned from their previous drills on the East Flank Fairway and I would imagine a drill 2km from the original discovery would be targeting thicker sands with a view to increasing potential net pay and therefore increased volumentrics.

Secondly, people have short memories, think back to the flow test of 14/10-2 and remember the technical fault that caused the guns to misfire during the flow test; thereby reducing the 242mmbl figure to 170mmbl as they didnt test the lower fan? So the lower fan is not even included in the CPR. Also remember the RNS back in June

it appears that all sands encountered beneath this regional seal at the Sea Lion location are charged with oil and no oil water contacts were encountered.

and

The oil down to level of 2,591 metres subsea is 116 metres beneath the lowest mapped point of the Sea Lion fan. The entire Sea Lion fan has an aerial extent of over 45 sq km and there are strong seismic indications of thicker reservoir packages elsewhere in the fan. The oil down to level is significantly lower than the lowest point of the Sea Lion main fan.

Ive heard the words significant upside potential used many time by Jungels and Moody, given that were at circa 40% discount to pre 10/4-3 prices when theyve said this, this seems to be an opportunity of lifetime on a risk reward basis.

What would happen if there is greater net pay at 14/10-4 than at 14/10/-2? In addition; Moody et al havent sold a single share thus far. Director transactions, for me, form a key part of my decision making model.

Finally, technically RKH keeps bouncing off support at 232 which is now the 20 EMA, if this falls support has is given by the 200 day average. The RSI looks good and many of the indicators have turned in the past week.

Crazy prices over at RKH and one day, maybe not today, maybe not tomorrow, but soon the market will correct itself.

Markymar,

Very good summing up. Several ifs still abound but I fully agree that the upside potential is mind blowing.
Due to the ever present risk factors, I am as committed as I want to be in RKH, but for those who intend to increase their holdings, there can't be a much better time than now.
Fundamentals are still good, but it is purely sentiment and nervousness that have dragged the SP downward, all this will change within the next month, and as you rightly state the market will correct itself.