Rockhopper Exploration (Edited highlights)

Rockhopper Exploration, the oil and gas company with key interests in the North Falkland Basin, has received firm commitments to raise up to approximately US$140 million (approximately £105 million), before expenses, by way of a conditional placing of up to 198,207,354 new Ordinary Shares and 49,551,833 Underwriting Warrants at an issue price of 53 pence[1] comprising:

• a firm placing of 162,813,189 Firm Placing Shares and 40,703,294 Firm Underwriting Warrants to raise approximately US$115 million at the Issue Price, conditional upon inter alia the occurrence of a final investment decision in relation to Phase 1 of the development plan for the Company's Sea Lion field, to be effected using the authorities to issue and allot new shares granted to the Directors by Shareholders at the Company's annual general meeting held on 27 June 2025 (the "Firm Placing"); and
• a conditional placing of 35,394,165 Conditional Placing Shares and 8,848,539 Conditional Underwriting Warrants to raise approximately US$25 million at the Issue Price, conditional upon inter alia the passing of the Resolutions at a general meeting of the Company (the "General Meeting") and the occurrence of a final investment decision in relation to Phase 1 of the development plan for the Company's Sea Lion field.

Members of the public are not entitled to participate in the Placing.

The Issue Price represents a discount of approximately 13.3 per cent. to the volume-weighted average price of 61.14 pence per Existing Ordinary Share for the 30-day period ended 30 July 2025.

The Company considers it important that existing Shareholders who are not participating in the Placing are given an opportunity to acquire new Ordinary Shares at 53 pence. The Company therefore confirms its intention to provide existing Shareholders with the opportunity to subscribe for new Ordinary Shares at 53 pence pursuant to an Open Offer to be announced on or around the date of Admission, which is currently expected to occur by the end of 2025. Pursuant to the Open Offer, the Company will seek to raise gross proceeds of up to €8 million (approximately US$9.2 million).

The making of the Open Offer is conditional upon the approval by Shareholders at the General Meeting. The Open Offer will include an excess application facility to enable Shareholders to apply for additional new Ordinary Shares in excess of their basic entitlements under the Open Offer.

The net proceeds of the Placing and Open Offer are expected to fund Rockhopper's proportion of the capex required for the Phase 1 development plan for the Sea Lion oil field in the North Falklands Basin ("Sea Lion"). The Phase 1 scope is over the northern development area of Sea Lion and is designed to recover 170 mmbbls of gross 2C resource through the drilling of seven oil producer wells, one gas injector and three water injector wells ("Phase 1 of the Sea Lion Development or "Phase 1"). Navitas Development and Production Ltd ("Navitas"), an indirect subsidiary of Navitas Petroleum LP, the operator of Sea Lion, estimates the total post-FID funding requirement as US$1.658 billion to the point of first oil production ("First Oil") and US$2.058 billion to project completion on Phase 1 of the Sea Lion Development. US$1 billion of the cost to project completion is expected to be funded through a senior secured debt financing package. The base equity requirement under the project financing to project completion, once all fees, interest charges, contingencies and post-First Oil revenues have been taken account of, is US$790 million. Under the previously disclosed loan agreements between Navitas and Rockhopper, the Rockhopper share of this is US$92 million. In addition, Rockhopper will need to provide for an additional US$10 million of cost overrun equity support, bringing the total Rockhopper project equity requirement to US$102 million. The remaining proceeds will go towards the contingent early project failure decommissioning funding requirement, which Rockhopper currently estimates its net cost to be approximately US$25 million, and other ongoing working capital requirements. 

The Company expects that the proceeds of the Firm Placing will be sufficient for Rockhopper to take FID in respect of Phase 1 of the Sea Lion Development. Given the importance of the overall Sea Lion development to Rockhopper, the Board has concluded that it is prudent and in the best interests of all Shareholders to raise additional funds as described below in order to provide further financial flexibility and to ensure, in so far as is possible, that further equity raises should not be required between FID and project completion of Phase 1.

The Board believes it could be possible to sanction the second phase of the Sea Lion Project relatively quickly after First Oil on Phase 1 depending on field performance, oil prices at the time, and various other project assumptions being positively met. Based on data contained in the senior debt lending case, it is currently envisaged that the second phase, and all subsequent phases, will be self-financing using excess cashflows once Phase 1 is on production.

Sam Moody, CEO of Rockhopper Exploration plc said:
"Having discovered Sea Lion some 15 years ago, we are obviously delighted to be able to announce this equity fundraise, which we are confident puts Rockhopper in the strongest possible position to take FID by the end of this year and to reach project completion of the first phase of Sea Lion with no additional equity dilution. We look forward to continuing to work with and support Navitas in its role as Operator in bringing Sea Lion onto production and finally crystalising the value in the asset for all of our stakeholders."

This is massively good news from Rockhopper who have taken advantage of very strong share price performance (1M +45%, 6M +105%, 12M +366%) to delve into the market and raise $140m at a time when operator Navitas are making noises about FID. Of course RKH cannot comment on this but getting funded now places the company in a strong backing position for when Navitas presses the button which I reckon could be imminent.

Rockhopper is now in the enviable position of being in the box seat on a huge project, surely now massively de-risked and if these numbers in today’s extensive announcement are in any way accurate will be able to ride the Sea Lion wave with no more need for equity raises.

The strong share price has meant that the company has not been left scrabbling around for significant investors and they even note that ‘the Placees include a combination of new Israeli based institutional investors as well as larger existing shareholders’ and that the raise was massively oversubscribed. It may be worth noting that when companies choose a farm-in partner, to select someone that might carry big investors with it count for plenty. I remain a huge fan of Rockhopper and readers know that there hasn’t been a bigger backer of Sea lion since Premier days and before…

Map source: KeyFacts Energy

Background to Rockhopper and the Sea Lion Project

Rockhopper Exploration is an AIM-quoted oil and gas exploration and production company based in the UK with key interests in the Falkland Islands. It was established in 2004 and admitted to trading on AIM in August 2005. Rockhopper's current market capitalisation is approximately £462 million.

Since 2004, the Company has built a portfolio of licences in the North Falkland Basin, containing Sea Lion and satellite discoveries. The Company discovered Sea Lion in May 2010 and went on to appraise and flow-test the field during the remainder of 2010 and 2011, as operator with a 100 per cent. working interest. Sea Lion is accordingly well appraised and has been the subject of many years of sub-surface, facilities engineering and pre-development work.

In 2012, the Company farmed down 60 per cent. and operatorship of its licence interests in the North Falkland Basin, including Sea Lion, to Premier Oil. From 2012 to 2021, Premier Oil undertook various pre-development activities including front end engineering and design and other studies with the aim of developing the field. Premier Oil submitted an 'Environmental Impact Assessment' and draft 'Field Development Plan' to FIG. The 'Environmental Impact Assessment' was accepted by FIG in 2020. Furthermore, significant efforts were historically expended to secure financing for the Project.

In March 2021, Premier Oil was acquired by Chrysaor Holdings Limited to create Harbour Energy. As part of the acquisition, Harbour Energy conducted a strategic review of Premier Oil's asset portfolio and concluded in September 2021 that Sea Lion, amongst other development assets it was acquiring, was not a strategic fit for the enlarged business. As a result, Harbour Energy decided to exit its interests in the Falkland Islands.

In April 2022, Rockhopper announced that legally binding agreements had been reached for Navitas to acquire the subsidiary of Premier Oil that held all of its Falkland Islands licences and an immediate further realignment of interests such that Navitas held 65% and operatorship, with Rockhopper retaining 35% across the North Falklands licence areas. As part of the transaction, Navitas agreed to provide the following loan funding to Rockhopper:

• the majority of Rockhopper's share of Sea Lion Phase 1 related costs from transaction completion up to FID are funded through a loan from Navitas with interest charged at 8% per annum (the "Pre-FID Loan").  Certain costs, such as licence costs, are excluded; and
• subject to a positive FID, Navitas will provide an interest free loan to Rockhopper to fund two-thirds of Rockhopper's share of Sea Lion Phase 1 development costs (for any costs not met by third party debt financing) (the "Post-FID Loan").  Certain costs, such as licence costs, are excluded.

Funds drawn under the Pre-FID Loan and the Post-FID Loan will be repaid from 85% of Rockhopper's working interest share of free cash flow.

[1] US$0.706 using the prevailing rate of exchange quoted by Bloomberg at 4 p.m. (London time) on 29 July 2025

Prospex Energy

Prospex has provided the following update on operations at its three main assets, the Viura gas field in northern Spain, the El Romeral power plant in southern Spain and including an update from the Selva Malvezzi production concession in northern Italy following the publication by Po Valley Energy Limited (“PVE”) (ASX: PVE) of its Q2‑2025 activity report.

Viura

The Operator of the Viura field, HEYCO Energia Iberia S.L. (“HEI” or the “Operator”), has advised Prospex that it has successfully repaired the leak in the production tubing of the Viura-1B well, identified in April 2025 (refer to 29 April 2025 announcement).  However, during the newly run completion of the wellbore, HEI identified an unexpected blockage of residual drilling mud.  A coil-tubing unit is needed to clear the obstruction, which is currently preventing the sliding sleeve from being actuated in order to allow gas production to resume.

Although this is a relatively simple process, sourcing an appropriate coil-tubing unit was not possible in Spain, so procurement necessitated mobilisation of a unit from Poland, resulting in a delay of bringing the Viura-1B well back into production.  Resumption of production is expected to follow shortly after the coil tubing unit is successfully deployed which is expected to arrive on site mid-August.

While the Operator awaits the arrival of the coil tubing unit, operations to remove the blockage with wire line methods have been ongoing, but this process is far slower than using the optimum coil tubing equipment.

Total natural gas produced from the Viura-1B well from start-up in December 2024 to the end of Q1-2025 was 30.2 MMscm = 1.1 Bcf (which is ≈ 4.4 MMscm = 154 MMscf net to Prospex).

The Viura acquisition significantly increased Prospex’s proven (2P) reserves by 6.5 Bcf (0.18 Bcm) net to Prospex.  Gross 2P remaining reserves at the Viura field is 90 Bcf (2.5 Bcm) and is expected to increase upon further evaluation of the newly drilled horizons.

Prospex owns 7.24% of the Viura field through its ownership of 7.5% of HEI.  Prospex will accrue 14.47% of the production income from the Viura gas field until payback of its capital investment plus the accrued 10% p.a. interest thereon.

Selva Malvezzi

The operator of the Selva Malvezzi production concession in Italy, Po Valley Operations Pty Limited (“PVO”), a wholly owned subsidiary of Po Valley Energy Limited (“PVE”) (ASX: PVE), announced its Q2‑2025 activity on 31 July 2025.  In the report PVO confirmed that it is on target to start field activities at the Selva Malvezzi Production Concession in October 2025 and steady production from PM-1 through the quarter.  PVE has a 63% working interest in the Selva Malvezzi production concession, while Prospex has the remaining 37% working interest.

Gas production and revenues from PM-1 gas facility in the Selva Malvezzi Production Concession

In addition, PVO confirmed the advancement of permitting revisions is underway to address further studies and recommendations from the technical commission of Ministry (MASE) Budrio Municipality, Civil Protection and Emilia Romagna region for the Broader Selva Development Program focussing on  Casale Guida 1d (Selva North), Ronchi 1d (Selva South), Bagnarola 1d(Riccardina), Selva Malvezzi 1d (East Selva) wells;.

Highlights

• Steady gas production from the Podere Maiar-1 well at Selva (“PM 1”) for the quarter averaging 79,783 scm/d continuing to meet predicted levels of production.
• Environmental Impact Assessment (“EIA”) revisions are underway to address further studies and recommendations from the technical commission of Ministry (MASE) Budrio Municipality, Civil Protection and Emilia Romagna region for the broader Selva Development Program.
• Field activities are scheduled from October 2025 for the 3D geophysical survey for the broader Selva Development Program and permitting processes and landowner agreements continue to advance.
• Gross quarterly production of 7.260 MMscm of gas (Q1‑2025: 6.724 MMscm), with 2.686 MMscm net to Prospex (Q1‑2025: 2.488 MMscm).
• Gross revenue for the quarter of €2.864 million (Q1‑2025: €3.338 million), with €1.059 million net to Prospex (Q1‑2025: €1.235 million)
• PM-1 continues to sell the gas from Selva Malvezzi to BP Gas Marketing.

Casale Guida 1d, Ronchi 1d, Bagnarola 1d, Selva Malvezzi 1d wells

The Selva Malvezzi Production Concession is the key area of focus for PVO with the next stages of development at Casale Guida 1d (Selva North), Ronchi 1d (South Selva), Selva Malvezzi (East Selva) and Bagnarola 1d (Riccardina) prospects.

The drilling programs for the four new drilling projects were submitted to the UNMIG department of the Italian Ministry of Environment and Energy Security (MASE) for drilling authorisation in September 2024.  The Environmental Impact Study (EIA) covering the drilling, development and production phases of the four wells was filed in December 2024.

During May 2025, the EIA technical commission of the Ministry (“MASE”) requested further studies specifically covering assessment of flood risk in the area given flooding events that occurred in the region in 2023 and 2024.  In addition, the Budrio Municipality requested a relocation of the Casale Guida (North Selva) and Ronchi (South Selva) well site due to community concerns regarding visual and noise impacts on the surrounding area.  The Selva Malvezzi-1 (East Selva) well site location will also be evaluated further to mitigate flooding risk concerns raised by the Civil Protection of Emilia Romagna Region.  PVO is preparing an updated EIA for resubmission which aligns with the Ministry’s observations and recommendations outlined.  The re-location of the surface locations of the two well pads does not impact the 3D seismic programme.

PVO received INTESA from the Region and the final authorisation by the MASE for the 3D geophysical survey acquisition on the Selva Malvezzi Production Concession in early April 2025.  Field activities, including the seismic acquisition, are scheduled for early October 2025 in accordance with guidance from landowners and relevant Farmer’s Associations, ensuring no impact on their late summer harvest. Permitting process and landowner agreements continued to advance in the quarter.

El Romeral

The El Romeral power plant near Carmona in southern Spain has not been producing since 1 July 2025.  As previously reported, a two-week shutdown of production was expected whilst the plant’s main transformer was replaced.  Tarba Energía S.L. (“Tarba”) the operator of the plant has been renting a transformer from a third-party supplier and that company requested that the transformer be swapped out for a more suitably sized unit at a lower rental cost.  There have been delays to the arrival of the new transformer unit due to circumstances beyond the control of either company.  Tarba is receiving compensation for lost production from the transformer provider at a rate of €3,000 per day plus other operational costs related to alternative power provision.  This compensation has now increased to just under €4,000 per day following the delay on the delivery of the replacement transformer.  Tarba does not have a firm delivery date, the expectation is that replacement will occur during August.  Whilst this is not an ideal situation, Tarba is receiving compensation for lost production.

Tarba is the company through which Prospex holds its 100% interest in the El Romeral production concessions and the associated El Romeral gas-to-power plant situated near Carmona in southern Spain.

Other investments

Prospex remains committed to its stringent investment criteria; namely its strategy of investing in onshore natural gas projects across Europe and to this end, is continuously evaluating new opportunities that have the potential to deliver long-term value for shareholders.  In Poland, the Company has applied for licences to own 100% working interest in prospective blocks in areas which have proven gas production, high potential prospectivity in the targeted geological horizons and high potential for new reserves to be unlocked which can be brought onstream within two to three years.  The licence applications in Poland are with the Ministry of Climate and Environment for evaluation.  The next step will be the public gazetting of Prospex’s applications and details of the proposed work programmes on the licences.

Mark Routh, Prospex’s CEO, commented:
“We are pleased with the consistent production performance achieved at Selva from the PM-1 well during the quarter, which marks an important milestone for the project.  In addition, we’re encouraged by the progress made and recent amendments implemented to advance the next stage of development at Selva, aligning with our broader growth strategy.  I appreciate the interruptions at some of our other projects are frustrating.  Circumstances beyond our control have unfortunately collided to impact operations at our investments, but with our operators we have a clear and proactive plans in place to swiftly and effectively manage this and reset us on our production and development path.

“The value of our portfolio remains strong; we still hold strategic interests in producing natural gas assets and have significant volumes of Proven, Contingent and Prospective natural gas resources ready to be unlocked.  I am confident that the ongoing actions of our operators will ensure the recommencement of production at Viura and at El Romeral in the near term and the continuing expansion of Selva.  We are committed to maintaining transparent communications with our shareholders and will continue to share further updates on progress from our respective operators as soon as we are in a position to do so.”

Not much to add today, Prospex remains a high quality play in areas where demand will stay strong for the longer term but has the usual infuriating delays ‘beyond their control’. Combine that with limited visibility on operational issues, shareholders cannot be blamed for continuing frustration. 

Original article   l   KeyFacts Energy Industry Directory: Malcy's Blog