Rockhopper (RKH) is midway through a four-well exploration and appraisal campaign to explore and understand the reservoirs in its licences, including the 400mmbbl Sea Lion development, shared with Premier Oil (PMO).

RKH is fully funded for Phases 1a and 1b, from which further development can be financed. This forms the majority of RKH's core value (144p/share), which is well above the current share price. Furthermore, our analysis indicates the value should increase markedly over time as first oil approaches. Beyond Sea Lion, the Isobel Deep discovery hints at another major discovery field, once fully explored and appraised. With pre-drill estimates of over 500mmbbl, it could more than double gross resources.

Development of first oil at Sea Lion in 2019

After a planned final investment decision (FID) in mid-2016, Sea Lion should see first oil in late 2019 under Phase 1a, with two or more phases unlocking resources from PL032 and PL04 over time. Current plans are to produce around 60mb/d from an FPSO, though success in further drilling may boost these plans in the longer term.

Tags: Rockhopper Exploration plc