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.

http://www.oilbarrel.com/nc/news/display_news/article/rockhopper-oils-sea-lion-discovery-reawakens-interest-in-the-south-atlantic/860.html

May 07, 2010

Rockhopper Oils Sea Lion discovery reawakens interest in the South Atlantic

It was the news that followers of the South Atlantic oil and gas story had hoped to hear for years.As the nation went to the polls yesterday, UK explorer Rockhopper Exploration was lifting the lid on a discovery following the drilling of its Sea Lion prospect in the North Falkland Basin.
The company said initial data showed that well 14/10-2 had found oil at intervals across 53 metres, with the oil 25 metres at its thickest point. The well was drilled by the Ocean Guardian rig to a depth of about 3,000 metres.

Investors will breathe a sigh of relief after the disappointment just weeks earlier when Desire Petroleum announced that it had found only poor quality oil in what was the first well to be drilled in the Falklands area in more than a decade.

If that news had dampened some of the wild optimism that has been building in this area for years, then the Sea Lion find certainly made up for it. Rockhopper which owns a 100 per cent stake in the well saw its shares effectively double in value by the end of the day, closing out at 93.50p.But others operating in the region also benefited, with shares up in each of the niche operators plying their trade in the area including Desire, Falklands Oil & Gas and Borders & Southern.

Rockhopper is now planning its next move, collecting additional data and samples before deciding whether to plug and abandon the well or to suspend it for future testing.The companys managing director Sam Moody says it could even drill an appraisal well on the Sea Lion site later on in the current drilling campaign.

We are extremely excited by the results of this well, he said. While we are presently acquiring additional data, current indications are that we have made the first oil discovery in the North Falkland Basin.He added: We will now focus on analysing in more detail the data gathered from the well, in addition to continuing preparations for the drilling of our Ernest prospect later in the year.

Rockhopper, which commenced the Sea Lion well a month ago, was set up in 2004 to pursue offshore exploration in the largely unknown North Falkland Basin, listing on Londons AIM market in 2005.It operates four concession areas alone PL23, PL24, PL32 and PL33, covering 3,800 sq km. It has also farmed into two Desire-run blocks PL003 and PL004.

The confirmation of an oil find is certain to whip up more interest in the area, and will help to re-risk further drilling both by Rockhopper and others.While the magnitude of the Sea Lion find is still uncertain, the discovery proves that there is oil out there. Broker Westhouse Securities puts the pre-drill estimate of mean recoverable resources at 220million barrels of oil.

But the find itself is probably more important than the scale of reserves at this stage. Although there are still many unknowns, including whether the oil will actually flow, Sea Lion will provide real encouragement for all Falklands enthusiasts to continue their work and to receive the backing of investors.

It is also likely to be of huge interest in Argentina too, with the UK-led oil exploration campaign sparking memories of the bitter 1982 Falklands conflict.This row flared again recently with Argentina stating that exploration is being conducted in its offshore territory. In February, its president, Cristina Kirchner, ordered all ships passing through Argentinian waters to obtain permits to do so.

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m
that wasnt on for long. its ok i aint going to repeat differently. it dont matter to price.it will do what it will do. hope it flies.maybe it already has. i dont know.
good luck to you.
regards
jkd.

The more I read about this exciting discovery the more I'm convinced this will be a spike and pullback at first...later on in the next few weeks...months who knows, but there is not enough to go on just yet...ref halifax..that's the problem...no test, just what kind of oil...heavy, or light...hey guys...don't go by me...I'm hoping to get back in lower...but I'm just saying those with a fantastic profit showing : take it....

DES Market cap 225M and no oil yet.

FOGL Market cap 230M and no oil yet.

RKH Market cap 250M and perhaps now 200M to 300M barrels recoverable nigh on in the bag, with another drill coming on Ernest and two other leads very similar to Sea Lion...much de-risked now.


RKH is the one of the three presently "undervalued". In case you did not see the AT buys were pouring in in the 140's - large large trades. That means the big boys are buying and see lots of upside from 140p levels. If you take it that Sea Lion alone is worth over 300p a share as just "oil in the ground"..... you can perhaps see why.

rf
i dont disagree with you, except to consider taking it in increments using trailing stops.
could end up still holding some or even many if price decides it wants to spike up again and keep going. just my opinion.
regards
jkd

double posting again arrrrrrrr..slow internet

Here is another thought not only have they hit oil and its looks like it is a very large find of more than 200 million barrels plus they have already classed the Johnson prospect drilled with the 14/5-1 well could contain contingent resources of 7.9 Tcf of recoverable gas reserves which is a huge find as well which must also put a value on Rockhopper..its just looking better all the time and am thinking of adding more.

see Johnson prospect on map

Does anyone no how much the gas is worth ?

m
this isnt the best place to top up or add more, in my opinion. dont be greedy.and please try not to encourage in new buyers without at the same time outlining and stating the high risk involved to them. thank you.
regards
jkd

It will be interesting to see how TFC played this one.

looking at the left hand chart in header we have a high plus 3 lower highs. that isnt considered good in chartist terms.dont make it a short though. not a buy until it breaks up through the original 92sh high and stays there. bit like DES, only over there it is 132sh or so.
i rest my case. could be wrong .just my own opinion and as always please dyor.
regards and good luck
jkd

I wonder how many so-called investors / traders shorted CNE on it's first major discovery. As I recall the SP was approx 350p when it hit, don't think it even doubled the first day, but eventually reached about 30 within a relatively short period.

pth
seems we agree then.based on "dont make it a short though". ermm , sorry what was your point? do we agree or not? bit confused on this one. is this rockhopper you are discusssing?
regards
jkd

The implications are massive, and yet people just talk about "stock price" and shorting.

This well has proved "good reservoir" it is porous and permeable and full of oil.

Sea Lion is far bigger than expected, so big they have no even found the oil/water contact yet and must drill an appraisal to find out how big it is.

Two other prospects are "basically the same" as Sea Lion, meaning they are likely now to be low risk drills.

This has massive implications not only for the UK and the Falklands economies, but for RKH too as a company, it surely will not be RKH for many years more as a major will be coming in to buy them up.

All thats needed to complete the story short term is the API of the oil.

27 would be very nice ! :)


PS - Lovely to see this as the lead story on C4 news and getting lots of press over the weekend.

From oil brat on iii


Ok folks as promised

First up, exploration requires luck as well engineering and all play to RKH they got it bang on the money. That said its not about the result of any individual well its about the basin and that is so fundamentally important to the future of both companies.

Those who have followed my rantings over the years will know that I favour DES over RKH (and actually I still do), however Im not afraid to hold my hand up and say Im wrong when I am. I was a significant buyer of RKH last week at around 85p. The fact I could buy them at that price was most surprising and I have made a pile of free money, result. See previous references to the competency of the city.

So lets look at the technical. Sea Lion has come in as expected, possibly a little more than expected. Its a sizable reservoir and is likely to indicate a +200m bbl recoverable find (note recoverable). The perm data was excellent 200 500md, its very good to first class. Unless the oil is treacle that should produce very well. What does that value RHK at? I would suggest on that single (not fully appraised) well that 250p in ground value per share is not unreasonable. It will take some time and another appraisal well and test but if that confirms the initial results then youd be looking at 450p to 500p based on Sea Lion alone.

Now that will raise the hackles of the derampers so lets look at that in more detail. At 500p a share you would value Sea Lion at circa 1.2 billion and the profit to be made on extraction and sale is of the order of 7 7.5 billion (less purchase cost and some capital expense, lift cost is factored in already and $16/bbl). Basically if Sea Lion is delineated you can at fairly low risk buy a 6 billion profit for an out lay of 1.2 billion. Its how large oil companies get to be very large oil companies. But that misses the entire point of both RKH and DES.

Both are entirely about the basin. Heres the story of the week, the North Falklands Basin is now proven. You will not find one single field in the basin, the geological odds on that was be monstrous, there will be multiple fields. All the nay sayers are or should be now finished, give up you lost. This information and RKH at 145 ish and Desire at 69 ish means the market has missed the point, as per usual.

Both are under valued as a function of assets, Desire have a condensate discovery as a bare minimum, and RKH are in the short term in an even better position. But the undervaluation as a function of potential and good will is enormous. I think in the fullness of time the shows in Liz and Beth will be of the same type and general play as Sea Lion the difference is the quality of the reservoir rocks. Desire went for multiple birds with one stone got a very very good result. RHK looked at that and said sorted, plan unchanged drill Sea Lion in the optimum place and the rest is in the RNS. I think Liz and Beth are going to end up being discoveries and commercial, its a function of sedimentology. The RKH well supports this possibility and proves the basin contains such units.

So what is the full potential. Some time ago I spent a few weeks doing my own research and looking at the possible field distribution. The US government did the same http://energy.cr.usgs.gov/WEcont/regions/reg6/p6/tps/AU/au606011.pdf
They indicate the probability of there being only one field of 250m 500m bbls (Well Sea Lion is that already, oil in place numbers not recoverable) and we havent even got started yet. They are indicating 40 possible discoveries I think that is considerably on the low side. It was also done pre the gas play and the new seismic / geological model.

My few weeks in the potting shed indicated Desire could have 8 billion recoverable, everything so far would push me to thinking that is more likely to be right than less likely (RKH have less but its still going to be very amusing to watch and good luck to them). I work off $8 in ground value for proven oil (pick your poison, thats mine). Obviously thats a staggering number and would put Desire at the top of the FTSE 100. That isnt going to happen for several reasons. A) It would require Desire to drill all the prospects and find all the oil B) It assumes they would have time before they where bought out.

There is now a map for oil generation, migration and trap and seal mechanisms in the NFB. This is going to significantly change the COS numbers, we will see an extended campaign and more finds, its now a certainty. (Yes they may have to raise more money but it will be forth coming). Desire, as per their business model will be bought out but at what price? The hypothetical 20 quid a share requires proven reserves of 1.2 billion barrels at $8/bbl. I think this is achievable, it may take 18 24 months but it is perfectly doable. I would then want a bit for good will so 2500p 3000p a share is probably full potential for Desire.

Now that little lot will probably induce a firestorm from the Deramping community, references to GKP etc. Sooo heres one to ponder. FOGL have also shot up this week. A tidy rise on the back of the North Falklands Basin, good for them, except they are not in the NFB. The result for RKH makes very little material difference to FOGL (it makes the world of difference to Desire), they might get slightly reduced / shared infrastructure but there is zero geological impact, their basin may as well be on Mars for its relationship to the NFB. Yet the market still marks them up, they just dont get it The more and more I read the oil press the more I realize that the market /city just doesnt have the expertise to match its reputation. I make a lot of money out of small oil and I do it on the Zulu principle of understanding more about it than the average man in the city.

There are still risks associate with the NFB, political, economic etc but geological have been very significantly reduced. In the next 10 years there wont be a better probable way to make money on the open market than buying into the basin at its earliest development stages. The price will go up and down as the market adjusts its underpants and Greece et al unravel everything but we still need oil and that is nice stable British oil. If you are in for 2 years plus you will see a many bagger unfold at low risk.

I await the howling but do you know what I dont care, Ive achieved what I wanted and this will release me from working with in the next two years I would estimate.

Regards
OB

There is a lot of talk about flow tests, however many are missing the point IMO.

Perhaps Friday's RNS was written to confuse your average PI with derampers calls of "no flow test for a long time" and allow institutions to buy based on proper understanding ?

For an oil reservoir to flow without any stimulation there must be permeability of 100 Milidarcy or more.

Reservoirs below 100 Milidarcy can be made to flow but require stimulation.

Now lets take the snippet from Fridays RNS


" Logs show excellent permeability. In the 25 metre pay zone, permeability ranges between 200 Milidarcy and 500 Milidarcy, with peaks at over 1 Darcy........"


Now that tells you that unless they have drilled into Treacle oil, its going to flow and flow well.

All we need to know now is whether its treacle or not.

27 API would be nice ! :) and thats what Shell recovered not too far away and much deeper.

So fingers crossed we get the API news of the fluid samples Monday or Tuesday, then all the pieces of the jigsaw are complete and away she blows.........


(20 API or higher is good, the higher the API figure the more valuable the oil is in general, up to about 45 API after which its not the case anymore).

Apparently EK closed his short position on friday at 85p and then went long as he believes the sp may go up several times from here.

bet his followers will be pleased if they have only just found out!

I think everybody is missing one point that this is at sea in incredible difficult conditions at times, this is not on land....the expenses for producing will be enormous and capital will be needed, loads of it....this is an excellent start, but who knows what else is down there ?.....Mauritania was supposed to be an eldorado....not quite as much as expected has been extracted.....my experience of sharp increases is a sharp pullback ...sort of three thirds up followed by one third back..that sort of thing...yes there are quite a few prospects out there but are they al going to come right ?...perhaps not...I feel the trend for this incredible "play" to take it fom Shares Magazine is for a very much volatile sp....JKD is probably right about trailing stop losses....in the short term anyway...

required field

re - ....the expenses for producing will be enormous and capital will be needed, loads of it

That is not a problem the big players wiil do it for RKH with time.