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.

I find the following paragraph a very good reason to stick with my FKL shares because the F.I.C. will be the prime mover here - owning the land and resources for the development.

QUOTE
The most significant, according to Andrew Matharu, Head of Oil & Gas at West House Securities, is that a mini Aberdeen would need to be built on the Falkland Islands to handle the vast amount of oil that would be pumped up from the ocean floor.

The construction of industrial grade infrastructure in-and-around Port Stanley may cost 2bn. Finding finance for such a large development will be a particular challenge for Rockhopper in the current climate.
UNQUOTE

Glad you said that Avsec, as i was beginning to wonder why i hold FKL. Now i can see a reason. btw, not far from your cider tree's up here in sunny Glos.

Rockhopper Exploration switches focus to engineering and financing after Falkland drilling success

Rockhopper Exploration (LON:RKH) today said that its Falkland drilling campaign has been very successful as it has established the Sea Lion discovery as a world-class asset.

The appraisal and exploration drilling is now coming to an end, with the final well currently in progress. Subsequently Rockhopper is focussing on engineering and financing as it moves towards a final investment decision for a future oilfield development.

This could involve bringing in a new partner, it said in this mornings interim results statement.

Rockhopper explained that it has prepared a data room for potential industry partners and debt providers to assess Sea Lion discovery.

We continue in the rare position of holding 100 per cent of what we are proving up to be a world-class asset, which makes a range of options available to us, said chairman Dr Pierre Jungels.

Having established that the field is commercial and that it will be developed, we will now look to proving how, and potentially with whom, best to achieve such a development.

Rockhopper said that following the recent appraisal drilling it will revise its oil-in-place estimates for Sea Lion, which currently stand at 1.2 billion barrels in the mid-case scenario. It subsequently plans to complete a new competent persons report by the end of March.

Meanwhile it said that its engineering work is proceeding to plan. It expects concept screening and concept engineering to be completed by year end. This will provide the firm with a sound basis to start the pre-selection of front-end engineering and design early next year, it said.

Furthermore it said that it has made a promising start to the financing process. According to Rockhopper it has been well received by all of the lending banks it has held introductory conversations with.

The company must complete its oil-in-place estimates and come up with detailed development costs and a timetable for first oil before it can progress to the next stage of financing talks, it said.

For this piece to progress to the next stage we need to conclude on our volumes in place and then work up the detailed development costs and timings expected to get to first oil.

Rockhopper chief executive Sam Moody said: The group continues to look at a variety of means of financing the Sea Lion development including lending banks and potential industry partners.

Costs for the development will depend on decisions such as whether a purchased or leased FPSO is used or whether the field development is by a full field or phased approach.

He added: The group has sufficient funds to get comfortably to a final investment decision in relation to the Sea Lion field.

Inevitably as drilling activity draws to a conclusion and the main focus of the group will shift from the field appraisal to the engineering, regulatory and financing aspects of the field development.

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Surely that's inevitable? The speculators who chase the drillbit will lose interest and the likelihood of increased debt are going to slow things down a bit. Of course they have a very attractive asset which should tempt a potential partener, but the pioneering exploration is done.

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"currently stand at 1.2 billion barrels in the mid-case scenario."....if you include this well they are drilling at present then the last update to this figure above was 2 wells ago so plenty of upside to that figure above.

Also like this quote

We continue in the rare position of holding 100 per cent of what we are proving up to be a world-class asset, which makes a range of options available to us, said chairman Dr Pierre Jungels.

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It does that,glad am going down my mine today far to windy today.

Canaccord note:
Alongside its interim results, Rockhoppper Exploration revealed that recent engineering work suggests the Sea Lion oil field offshore the Falkland Islands should be produced using 18 wells spread across three drill centres. This compares with the companys previous expectation that the field would be developed with 24 production wells from four subsea manifolds and, as a consequence, plateau production guidance has been reduced by approximately 25% to 80,000 90,000 b/d.

At least in part, we understand the reduction in the number of drill centres has been driven by well 14/10-8, which encountered water. Hence, there will be no need for any production wells in that area of the reservoir. Meanwhile, it seems that dynamic reservoir modelling work undertaken by Rockhopper has indicated that ultimate oil recovery from Sea Lion will be maximised if the plateau production rate is reduced

Changes reduce the value of field but not by much.
Even after reducing our capital expenditure forecast by US$600 million, the lower production rate has reduced our estimate of Sea Lions net present value. Using an oil price of US$87.50 flat real allied to a 12% discount rate, we now think it is worth US$4,088 million rather than US$4,553 million. Nonetheless, the new figure still translates into 899p/share, which is considerably more than the current stock price, and Rockhopper retains significant net cash.

Harry whichever way you look at it dilution is going to occur whether it is through fund raising or a joint venture with a partner with deep pockets.

Dilution of what though.

Yes there will be dilution of the current value, but as soon as a partner comes on board, the figure used in any dilution case obviously increases, therefor until we know the size of the new package, IE total value of the whole, any attempt to put a figure of value onto the enhanced whole company figure is both impossible and irrelevant.

Dilution can not be looked at in isolation, otherwise whenever a company ties up with another, the value of the pre tie companies would always be diluted.

When/if any partnership is formed, that is the time to look at the partnership whole value, and calculate if any dilution has occurred.

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Will RKH follow Desire lead

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Great news better than expected we have just added about another 250 mill barrels + to what we have already.

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Can i say one thing.......Pro you dont know what your talking about.

This will go straight into auction!

EDIT. Never even made it out of pre opening auction, so apart from the difficulty in buying or selling (who want to sell) just wait for the book to settle then we will have BoooooooooooooooM.

At 0806 hrs, even Fogl has been dragged into auction (des was at opening).

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