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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lol

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It's all nothing but a false dawn.

happy larry - perhaps you hadn't noticed, but the whole market is pretty weak

With good news, RKH usually defies gravity.

Blimey - I hope some of you took some profit.

In auction -6.2%

Goldman Sachs note:
"We assumed that Rockhopper would give away a 30% stake in the field but receive no cash consideration. Overall the deal is dilutive to our target price, but still results in significant levels of upside to the current share price. The print from the deal (implying a valuation of c.US$1.67 bn for 100% of the field excluding the impact of discounting cashflows or c.US$1.35 bn including the discounting impact) implies upside to Rockhopper’s current EV of c. US$1.1 bn.
While not as good as we had hoped for, the deal still provides Rockhopper with funding that should be sufficient to reach first oil and therefore helps de-risk the project. We believe that the valuation of the Rockhopper stake, post the deal and the implied readacross from the value of the deal are both accretive to the current Rockhopper share price. Although we believe that some in the market would have been hoping for a larger partner in the field, we believe that Premier’s development experience and size means that the project will be bringing in an experienced partner who will have real focus on monetizing the potential of the field. As a result we would expect the shares to react positively today.
Our target price is under review. We would also see the deal as positive for Premier."

Jefferies note:
"Deal terms: 60% farm-out, $231m cash, $722m development carry, $48m exploration carry, financing facility availability, Premier takes operatorship. Premier will take a 60% operated interest in the project although Rockhopper states they will continue to have sub-surface lead. In addition to the upfront cash, Premier will carry the development up to $1.8 bn and exploration up to $120m ($722m/$48m net to Rockhopper’s interest). Rockhopper will have the option to draw financing from Premier with an effective 15% cost of capital with the first trigger point to utilise at FDP (targeted in 1H14). Rockhopper has the option to secure any other third party financing if it is more advantageous.
Acquisition terms in line with forecasts: $4.70/bbl (undiscounted, $3.61/bbl @ NPV10). We estimate the cash and carry consideration equates to $4.70/bbl on an undiscounted basis. Using Premier’s forecasted capex profile for the carry, we estimate the NPV10 value of the $770m development and exploration carry is $558m, implying a discounted value of $3.61/bbl. Premier brings valuable expertise and experience. We believe Premier brings a valuable development skill set to the Sea Lion development with experience not only with FPSO developments in similar operating environments (water depth and weather conditions) but also with waxy crude developments through their successful Chim Sao development in Vietnam. PM(Euro at 1.2185)
Development: First oil pushed back to 2017, in line with our forecasts, E&A program TBD. Premier will take over operatorship and lead the process through FEED. We believe it will likely take some time for Premier to take over the project and determine if additional pre-development E&A is appropriate. If pre-development E&A is pursued, we believe it is not likely until at least late 2013. While updated plans are still preliminary, current rough guidance is for FDP in 1H14 and first oil in 1H17. Rockhopper had previously expected 2015. We forecast mid-2017 first oil. Premier estimates $5bn capex, in-line with our estimate of $5.1bn.
Exploration: Falkland Islands plus AMI for South Africa, Namibia and Southern Mozambique. Premier will carry $120m gross capex which both parties estimate will cover 3 wells in the North Falkland basin including most likely Berkeley (29mmb prospective), S2 (50mmb prospective) and one other. They will also have an area of mutual agreement in the South Atlantic conjugate margin of South Africa, Namibia and Southern Mozambique. Our 330p/sh SoP, positive for allowing Rockhopper to advance Sea Lion. We believe these acquisition terms reaffirms our 330p/sh SoP as terms were in-line with our forecasts. We view the deal as positive for Rockhopper as it removes the significant financing overhang on the company but we caution we see limited additional near-term catalysts for the stock."

SP reflects reality, huge costs to extract oil,first oil 5 years away,volatility of oil price as sources diversify. The only winner is likely to be FKL.

So the farm-out is really bad news for RKH. Just wonder why they did it if they think there is a huge reservoir of hydrocarbons. Probably they knew something and wanted Premier Oil to share the burden.

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I used to be indecisive......

Looks like RKH has adopted a large candlestick.

...or a huge erection

or someone placing the candle indelicately

Blimey !....why the drop with good news....I suggested profit taking but this is ridiculous....

Looks like lit of punters been taken by the big boys who are getting your shares cheap on good news watch the bounce tomrrow

one would like to think so, but though sp is currently bouncing, the order book remains weak