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.

Mind you, I suppose its quite clever as the first drill is "outside" of the proposed discovery area and therefore has NO EFFECT on the present 170MMBO and potential upgrade back to 242 MMBO recoverable barrels.

In effect, if this one fails it has no impact on the company as its outside the defined Sea Lion discovery area, but if it comes in then the big figures get thrown around and Sea Lion is confirmed as an "elephant", real world class and possibly up to a billion recoverable barrels.

So its an astute move, on reflection to do the big upgrade no downgrade (big upside no downside) drill first, before the second one in the discovery area and therefore looking to upgrade whats already known.

http://www.proactiveinvestors.co.uk/companies/news/24152/broker-roundup-desire-petroleum-rockhopper-gulfsands-ggg-resources-african-eagle-telit-communications-24152.html


Broker Roundup: Desire Petroleum, Rockhopper, Gulfsands, GGG Resources, African Eagle, Telit Communications

Monday, December 20, 2010 by Jamie Ashcroft

As ever, oil exploration activity in the Falklands attracted analysts' attention this morning.

With separate updates Desire Petroleum (LON:DES) and Rockhopper Exploration (LON:RKH) gave investors details of their next moves in the North Falklands basin.

Desire has now spudded the next exploration well in the faraway oil frontier, the Dawn/Jacinta 25/5-1 well.

With the drilling results due in a month's time, investors will be hoping that the new year will bring new fortunes for the oil explorer that has raised hopes but ultimately disappointed in recent weeks.

David Farrell, oil and gas analyst at Evolution Securities, gives the well a slim chance of success.

One previous well has been drilled in this area (Ernest) by Rockhopper and was found to be dry and we have the Dawn/Jacinta prospects having just a 6-8% chance of success, Farrell said in a note to clients.

He adds: We are sceptical on the chances of the Dawn/Jacinta well and therefore keep our Reduce (rating) on Desire.

Meanwhile, Rockhopper told investors that it has taken up two additional drilling slots on the Ocean Guardian rigs schedule.

The two wells were originally pencilled in under a contract between Desire and the rigs owners Diamond Offshore Drilling. Rockhopper is also in discussion to add another 2 well slots to the programme.

Consequently Rockhopper expects to drill the next well in January, after Desire has finished drilling Dawn/Jacinta.

David Farrell also commented on Rockhopper, emphasising that the explorers valuation is supported by its earlier discovery in the basin.

Rockhoppers share price is underpinned by the Sea Lion discovery and we like the companys leverage to a fully funded E&A campaign in 2011, Farrell said in a note to clients.

Westhouse Securities analyst David Hart also comented on the news.

"The updated drilling schedule for the Ocean Guardian is good news for Rockhopper, as it will accelerate its planned exploration and appraisal activity on Sea Lion," Hart said.

The analyst rates Rockhopper as a 'buy'.

Edison O&G sector report.

http://www.edisoninvestmentresearch.co.uk/sectorreports/OilGas201210Review.pdf

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StockMarketWire.com
Rockhopper Exploration shares moved up 14p after it agreed to take up two optional drilling slots under the original rig contract between Desire Petroleum and Diamond Offshore Drilling, owners of the Ocean Guardian drilling rig.

The Falklands explorer plans a significant drilling programme in the North Basin during 2011 with the next exploration well expected to spud next month.

CEO Sam Moody said: "We are delighted to have secured the use of the Ocean Guardian for a further two wells and are in discussions to secure further drilling slots.

"We expect to undertake a significant drilling programme during 2011, including a number of appraisal and exploration wells designed to refine our understanding of our northern licences."

Oriel Securities commented that the next well is expected to target the northern lobe of the Sea Lion fan system, which lies outside the proposed Sea Lion discovery area.

"If successful the northern lobe has the potential to largely de-risk the P10 upside case for Sea Lion (669mmb). In addition the well will target a deeper fan which covers an area of 42sq km which has the potential to be a material target given the P10 estimate for the shallower targets assumes a real extent of 55sq km.

"Our risked NAV currently stands at 496p/sh, which includes the current P50 estimate for Sea Lion risked at 66% CoS.

"We retain our BUY recommendation and note that if the P10 upside case can be proven this could be worth over 1600p/sh."

P10 price looks rather attractive Harry!

Its a tally ho chav....come on the Rock!!!!!!

I concur chav. Of course, brokers have been known to get it wrong, but I am prepared to be seduced for the time being!

wake up guys! ... are Oriel house brokers? .... also. RKH haven't even starting drilling yet, let alone found anything (additional)

still out at mo as my limit buy didn't get triggered and as cyners says end of jan before drilling so it looks like the 290's have gone and will have to hope for low 3's. Besides have spent profit on xel so time for that to come good and get back in.,.

Oh great! Thanks Cynic. My dream shattered already. Didn't last long and I will say your bedside manner is a bit rough! ;o)

i was a pupil of dennis skinner aka the beast of bolsover

Dennis Skinner could be very witty with his one liners , but never contributed anything of substance to the debate.

like the boy said, though value like beauty is in the eye of the beholder

Ha..so they haven't drilled for the P10 confirmation yet then? I guess that's why the sp is so low still!!

First of all, this first well has nothing to do with the present estimate of Sea Lion being 170 million recoverable barrels, as it is being drilled outside the defined Sea Lion area. It also has nothing to do with the potential upgrade to 242 million recoverable barrels, again as it being drilled outside the present Sea Lion defined discovery area.

However, take this in :

......."If successful the northern lobe has the potential to largely de-risk the P10 upside case for Sea Lion (669mmb). In addition the well will target a deeper fan which covers an area of 42sq km which has the potential to be a material target given the P10 estimate for the shallower targets assumes a real extent of 55sq km........


First of all, it is testing the P10 669 million recoverable barrels area, BUT it is also targeting a second fan, of some 45sq km, which if that contains oil too, would suddenly make Sea Lion potentially over 1 billion barrels recoverable... an absolute giant of a find and one which on its own would make the North Falklands commercial as a new producing region.

Pretty exciting giving the share price still is undervaluing the "defined" Sea Lion discovery area, which is nothing to do with the 1st drill, however the potential is there to make the NFB commercial and define a new discovery area of 1 billion barrels recoverable (and all 100% owned).

People can talk down the Falklands as much as they want to, that is their right, however I am playing to make money and RKH could make its present holders very very rich overnight with that 1st drill.

1 billion barrels @ 8.5 US$ a barrel in the ground = 5.5 billion market cap, or an easy 7 times the current share price.

And that is just one "lobe" of the potential Sea Lion extension area, there is still the Southern undefined lobe to test as well.

And that excludes the other potential leads of George, Chatham, Fox, Stephens, Jason etc....

Anyone who think that RKH cannot go up much in 2011 is clearly mad, it has risks yes, but as the present share price ignores a quater of a billion pounds in cash and the most of the current Sea Lion defined 170MMBO the risk is small, and there is magnificent potential upside and RKH is my stock pick for 2011.

i don't know about "nap of 2011", but at the present levels, RKH looks good value, well underpinned with its known discovery

Well, I would say that the order of the drills not only suggests an astute board of directors but there is reason in there, for it seems to me the talk of a farm out to someone like Hess is strengthened by the new knowledge of going for the Billion first, and then appraising the present Sea Lion discovery area.

They could not farm out to Hess IF they honestly thought Sea Lion was potentially a Billion barrels, as Hess would not pay that much with no proof and RKH could not accept a cheap price for farm in.

So it makes sense to see if Sea Lion is a giant, and also appraise the present before a major farm in.

This is why I think the new details on the drilling order confirm, IMO, that farm in talks are ongoing and based on the results of those two wells the price of the farm in will be decided........

as you rightly say, much will depend on the next results ..... how brave one wants to be in the meantime depends on one's pain threshold and/or if one wants to buy some for trading as well as keeping longer term

An extract of Tipping Tom's recent OB presentation.

The outlook for oil, as said by Goldman Sachs and others, well TT is in agreement too. Mid-East problems ? Interesting, certainly I have no exposure to anything in the Middle East, but anyone who has could suffer big time if things heat up, while oilers focussed on other area's might surge, those with their hand in the ME might be going down fast.

As the Chinese say, "May you live in interesting times" - and anyone with lots of exposure to black gold has been and still is having very interesting times !! :)

http://www.mediafire.com/?r6bu3l17crtndul

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and the chinese saying is meant perjoratively - if that is the right word - or as an anglo-saxon acronym GFY