Rockhopper Exploration, the oil and gas company with key interests in the North Falkland Basin, announces its unaudited results for the six months ended 30 June 2023 ("H1 2023").

YEAR TO DATE HIGHLIGHTS

Sea Lion and North Falkland Basin

• Reworked base case project reduces costs while increasing total production
• Total barrels developed: 269mmbbls
• Production plateau: 80,000 bbls/d
• Pre first oil capex US$1.3bn, assuming leased FPSO
• Life of field costs less than US$30 per barrel
• Sea Lion is competitive on a global scale
• Base case gross joint venture NPV10 >US$4bn at $77 Brent
• Work to refine project phasing and financing plan continues

Ombrina Mare

• Rockhopper awarded c.€190 million plus interest (the "Award") in August 2022 following successful arbitration outcome
• Italy seeking to have the Award annulled; Rockhopper contesting annulment
• Stay of Enforcement lifted, escrow arrangements in place
• Rockhopper exploring all avenues to secure value
• Annulment hearing set for January 2024

Corporate and Financial

• Continued focus on costs post completion of successful capital raise in July 2022
• At 30 June 2023, the Group had 53.9 million unexercised 9 pence warrants in issue, with an expiry date of 31 December 2023
• Cash and term deposit balance at 30 June 2023 of US$6.7 million
• Highly experienced new Non-Executive Chair (Simon Thomson) and Non-Executive Director (Paul Mayland) assuming roles from 1 October 2023

Outlook

• Work continues on refining new lower cost Sea Lion development and financing plan
• Stay on Enforcement on Award lifted - Rockhopper in a position to commence legal proceedings against Italy for non-payment
• Navitas targeting Sea Lion FID during 2024

Keith Lough, outgoing Chairman of Rockhopper, commented:
"After nine challenging and enjoyable years, John Summers and I will leave Rockhopper in the strongest position your Company has seen for some considerable time. We have a committed, focussed, and capable partner that has already worked up a hugely impressive lower cost, highly capital efficient project at Sea Lion. In addition, the Stay of Enforcement on our €190million ICSID award is now lifted and we are working with our advisers on all avenues to monetise this award. Our 2022 capital raise allowed us to extend our licences, bring Navitas on board and continue to contest the Arbitration. Finally, we welcome Simon Thomson and Paul Mayland to the Board, bringing with them a wealth of directly relevant experience in the industry and detailed knowledge of Sea Lion.

"I wish the new Board and all holders every success for the future, and I know your Company remains in the best possible hands."

Results for the period

For the period ended 30 June 2023, the Group reported revenues of US$nil (H1 2022: US$0.5 million) and a loss after tax of US$2.6 million (H1 2022: loss of US$0.7 million). The increase in loss after tax was driven mainly by a reduction in net foreign exchange gains on GBP denominated balances. In particular, the weakening of the GBP against the USD resulted in a prior year US$4.4 million gain on the carrying value of the tax liability with FIG.

Oil and gas assets

The Sea Lion development remains central to the Group's plans and the additions in the period of US$2.0 million almost entirely relate to this project. As part of the transaction to bring Navitas onto the licences, Navitas agreed to provide loan funding to the Group to cover the majority of its share of Sea Lion phase one related costs from Transaction completion, in September 2022, up to Final Investment Decision ("FID") and has interest charged at 8% per annum (the "Pre-FID Loan"). Subject to a positive FID, Navitas will provide a second interest free loan to fund two-thirds of the Group's share of Sea Lion phase one development costs (for any costs not met by third party debt financing). 

Certain costs, such as licence costs, are excluded in both instances. Funds drawn under the loans will be repaid from 85% of Rockhopper's working interest share of free cash flow.

KeyFacts Energy: Rockhopper Falkland Islands country profile