Rockhopper Announce Result of Independent Resources Audit
Rockhopper Exploration plc (AIM: RKH), the oil and gas company with key interests in the North Falkland Basin and the Greater Mediterranean region, is delighted to announce the completion of an independent audit of the Contingent and Prospective Resources of its assets in licences PL032 and PL004 in the North Falkland Basin.
The audit was completed by ERC Equipoise Limited (“ERCE”) (the “ERCE Audit”) and the letter summarising the findings of their audit to the board of directors will be published on the Company website. Additionally, certain updated management estimates utilising the ERCE Audit work are being provided, most particularly around resources contained in the Isobel Elaine Area.
Sea Lion Complex
ERCE Audit Highlights
· Discovered STOIIP 1,667MMstb, 834MMstb net to RKH (Best Case)
· Discovered 2C resources 517MMstb oil, 258MMstb net to RKH
· Discovered 3C resources 900MMstb oil, 452MMstb net to RKH
· Total discovered 2C resources including gas 747MMboe, 392MMboe net to RKH
· Total discovered 3C resources including gas 1,462MMboe, 798MMboe net to RKH
· Audited near field low risk exploration upside of 207MMstb, 105MMstb net to RKH (Best Case, unrisked)
· Additional upside in West Flank if oil-bearing (management resource estimate 60MMstb)
Isobel Elaine Area
ERCE Audit Highlights
· Discovered STOIIP 277MMstb oil, 177MMstb net to RKH (Best Case)
· Discovered 2C resources for Isobel Deep (F3H Fan) 20MMstb oil, 13MMstb net to RKH
· Undiscovered STOIIP 282MMstb oil, 180MMstb net to RKH (Best Case)
· Additionally for the Emily, Isobel and Isobel Deep J fans, management has applied 25% and 35% recovery factors for 2C and 3C respectively against audited STOIIP:
o Management 2C resources 49MMstb oil, 31MMstb net to RKH
o Management 3C resources 198MMstb oil, 127MMstb net to RKH
Rockhopper is pleased to report that, as a result of the exploration campaign of 2015-2016 and the acquisition of Falkland Oil and Gas Limited, completed in January 2016, its net Contingent Resources base in the North Falkland Basin has doubled to over 300 million barrels (MMstb) of oil (2C – audited plus management estimates).
Total gross Contingent Resources over PL032 and PL004, including gas, are 747 million barrels of oil equivalent (MMboe) on a 2C basis and on a 3C basis 1,462MMboe (audited plus management estimates), with Rockhopper’s net share being over 50%.
The ERCE Audit has confirmed over half a billion barrels of 2C oil resources in the reservoirs that together make up the Sea Lion Complex including the reservoirs discovered in the Zebedee well. These resources are intended to be developed in two phases, the first of which will develop the resources in the north-east and north-west of the SL10 and SL20 fans.
In the Isobel / Elaine Complex, where data collection was compromised for operational reasons, ERCE has evaluated the Discovered STOIIP for each of the fans and attributed Contingent Resources to the Isobel Deep (F3H) fan from which significant oil was recovered to surface. For the other oil-bearing fans (Emily, Isobel and Isobel Deep J), ERCE believes that recovery factors comparable to those applied to discoveries could be achieved if an appraisal programme demonstrates the potential to flow oil at a rate comparable to wells in these offset discoveries. For these fans, management has assigned a 25% recovery factor for the 2C and 35% for the 3C resources.
In addition to the discovered resources, management believes there are a large number of near field prospects in the attractive and relatively low risk Isobel / Elaine appraisal area for which estimates of STOIIP and oil prospective resources have been made.
The Company did not commission ERCE to audit the Contingent Resources for the Johnson structure (65MMboe, 26MMboe net to Rockhopper) last audited in 2012 by Gaffney Cline & Associates, nor does it include the Contingent Resources for the Liz gas discovery (61MMboe, 58MMboe net to Rockhopper) last audited by Senergy in 2012. Additional PL003 and PL005 resources, also audited by Senergy in 2012, have not been reviewed at this time.
Sam Moody, Chief Executive of Rockhopper, commented:
“In our view this new audit confirms the potential of the North Falklands to be a billion barrel basin. The Sea Lion Complex itself holds over half a billion barrels with almost 270 million barrels of low risk near field upside (including the SL20 west flank in oil-bearing case) which we believe could be assessed with as few as 3 or 4 more optimally targeted wells. In addition, the Isobel Elaine discovery has the potential to be a third regional development potentially containing over 500 million barrels. Combining the well-appraised Sea Lion field, the low risk near field upside and the Isobel Elaine appraisal area, a billion barrels of recoverable oil is within reach within the basin thanks to the outstanding track record of our sub surface team.”
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