Placing

RNS Number : 5834U

Rockhopper Exploration plc

18 October 2010

Rockhopper Exploration plc ("Rockhopper" or the "Company")

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, SOUTH AFRICA OR JAPAN

Proposed fundraising to raise approximately £ 200 million through the issue of new ordinary shares

Details of the Placing

A placing (the "Placing") of new Ordinary Shares, with both new and existing institutional shareholders (the "Placing Shares") is being conducted, subject to the satisfaction of certain conditions, through an accelerated book-building process to be carried out by Canaccord Genuity Limited ("Canaccord Genuity"), and Merrill Lynch International ("Merrill Lynch") acting as joint bookrunners (the "Joint Bookrunners") in relation to the Placing. The identity of Placees and the basis of the allocations are at the discretion of Rockhopper and the Joint Bookrunners. The number of Placing Shares and the price at which the Placing Shares are to be placed (the "Placing Price") will be agreed by Rockhopper with the Joint Bookrunners at the close of the book-building process. Details of the number of Placing Shares and the Placing Price will be announced as soon as practicable after the close of the book-building process.

The Placing Shares will be issued credited as fully paid and will rank pari passu with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid on or in respect of such shares after the date of issue of the Placing Shares. The Placing will be made on a non pre-emptive basis.

The Company will apply for admission of the Placing Shares to be traded on the AIM market of the London Stock Exchange ("Admission"). It is expected that Admission will take place and that trading will commence on or around 8 November 2010.

The Placing is conditional upon, inter alia, Admission becoming effective and upon the passing of the Resolution (without amendment) at the Company's General Meeting proposed to be convened for on or around 5 November 2010. The Placing is also conditional on the Placing Agreement made between the Company, Canaccord Genuity and Merrill Lynch becoming unconditional and not being terminated in accordance with its terms. It is anticipated that the settlement date will be on or around 8 November 2010.

Appendix I to this announcement (which forms part of this announcement) sets out the terms and conditions of the Placing. Attention is also drawn to Appendix II to this announcement entitled "Risk factors".

Background to the Placing

The recent successful flow test at Sea Lion has validated the potential for commercial oil in the North Falkland Basin and has significantly enhanced the prospects for the Company. The Company is now preparing to progress its operational programme which will include appraising the Sea Lion discovery, shooting additional 3D seismic across the extent of the North Falkland Basin and drilling further exploration and appraisal wells on its Northern acreage. The Company is pleased to announce that a number of highly attractive new targets have been determined.

Diamond Offshore Drilling (UK) Limited, the owners and managers of the Ocean Guardian semi-submersible drilling unit, which is operating in the Falkland Islands and is currently engaged in the drilling campaign, has recently made a proposal to Rockhopper, at Rockhopper's request, for a continuation of the drilling campaign under a new rig contract consisting of a possible three firm wells and five options extension. The execution of any such contract with Diamond Offshore Drilling (UK) Limited would be subject both to the deposit by the Company into an escrow account of significant funds sufficient to cover the day rate and other obligations and to agreement on a form of contract acceptable to both parties.

Furthermore, the Company has entered into two letters of intent with a seismic contractor to acquire additional 3D seismic using two separate vessels. The Company intends to enter into contracts to procure both vessels shortly and, if it does so, it expects that work will begin before the end of January 2011 to allow Rockhopper to better analyse the Sea Lion sandstone fans, as well as allowing more detailed and accurate mapping of additional exploration upside within the basin.

Following the Company's £48.5 million share placing in June 2010, Rockhopper has approximately USD $71.0 million of financial resources available as at 30 September 2010. Rockhopper is confident that it has sufficient financial resources available to meet its near term commitments, but the Board believes that it should seek additional funding to support the Sea Lion appraisal programme, realise the full potential of Rockhopper's exploration portfolio and substantially move the Company towards being the first oil producer in the Falkland Islands.

In order to be able to implement any pre-emptive equity offering to its shareholders, the Company would be required to prepare a prospectus, to be approved by the Financial Services Authority. The prospectus would take a number of weeks to complete with proceeds being received at least two weeks thereafter. The Placing will provide the Company with funds significantly more quickly than a pre-emptive equity offering and will accordingly put the Company in a position to enable it to secure a contract with Diamond Offshore Drilling (UK) Limited for the Ocean Guardian drilling unit and contracts to acquire the vessels to carry out the additional 3D seismic referred to above. Given the current status of the seismic letters of intent and the new offer for the Ocean Guardian drilling rig the Company believes it is impossible to undertake an equity funding in any way other than a placing in a timely fashion.

The Company having been through a process of reviewing how it might best meet its funding requirement has concluded that it is in the Company's and its shareholders' best interests to raise approximately £200 million through the Placing.

Use of Proceeds

Whilst the Sea Lion discovery has enhanced prospects for the Company and its shareholders, further significant appraisal and exploration activity will need to be undertaken given the frontier nature of the basin, to prove up the full potential of that basin. Rockhopper's short and medium term aims are to:

· appraise the Sea Lion prospect in order to move towards a final investment decision;

· drill further exploration wells on its northern acreage, where the Board believes there are additional prospects potentially providing material upside;

· shoot additional 3D seismic across a wide area of the North Falkland Basin, possibly sharing the programme with the other operators to help to defray the costs;

· drill further exploration wells on its southern acreage, should the interpretation of the newly acquired 3D seismic identify suitable prospects; and

· meet the ongoing commitments of the farmed-in acreage, where Desire are drilling and might be likely to appraise following a discovery.

Reaching the point of a final investment decision for the Sea Lion prospect will require a full appraisal programme and a field development plan. A full appraisal programme will require drilling a number of appraisal wells, all of which are likely to be cored but not all of which should need to be tested. In order to move towards a final investment decision both a development plan and an amount of front end engineering design will be required. Given the frontier nature of the basin, any development plan will need to be particularly extensive, covering all the challenges relating to local infrastructure and logistics as well as the development of the asset. Furthermore, whilst the Board believes that Sea Lion alone is of sufficient size to justify the next stage of investment, it wishes to continue the exploration of the balance of its acreage. Further exploration will require additional 3D seismic and exploration wells. In terms of 3D, a survey is being commissioned to cover a number of areas, which are likely to include the continuation to the south of the Sea Lion prospect, the continuation to the north of the Johnson contingent gas resource feature and possibly further work in the southern acreage, licences PL023 and PL024. In terms of further exploration wells, the initial targets are expected to be in the northern acreage, licences PL032 and PL033. No further exploration wells are likely to be drilled in the southern acreage (PL023 and PL024) until the results of the any 3D survey in the area have been fully interpreted.

Sam Moody, Chief Executive of Rockhopper said:

"This funding, and the subsequent work programme, will enable the Company both to significantly enhance our understanding of the size of the Sea Lion discovery and to continue the exploration of the remainder of our acreage. This funding, therefore, marks an important milestone in the Company's development as we move into the next phase of Rockhopper's growth."

Contacts

Rockhopper Exploration plc Sam Moody - Chief Executive		+44 20 7920 2340 (via M: Communications)
BofA Merrill Lynch		+44 20 7996 1000
Andrew Osborne Oliver Holbourn Paul Frankfurt

Canaccord Genuity		+44 20 7050 6500
Robert Finlay
Charles Berkeley
Henry Fitzgerald-O'Connor

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, SOUTH AFRICA OR JAPAN.

Certain statements in this announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that would cause actual results or events to differ from current expectations, intentions or projections might include, amongst other things, changes in oil prices, changes in equity markets, failure to establish estimated petroleum reserves, political risks, changes to regulations affecting the Company's activities, delays in obtaining or failure to obtain any required regulatory approval, failure of equipment, uncertainties relating to the availability and costs of financing needed in the future, the uncertainties involved in interpreting drilling results and other geological, geophysical and engineering data, delays in obtaining geological results, the success of future explorations, acquisitions and other strategic transactions and other risks associated with offshore exploration, development and production. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements, which are not guarantees of future performance. Forward-looking statements speak only as of the date of such statements and, except as required by the FSA, the London Stock Exchange or applicable law, each of the Company, Canaccord Genuity and Merrill Lynch expressly disclaims any obligation or undertaking to review, revise or release publicly any updates to any forward-looking statements to reflect any changes in Rockhopper's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based, whether as a result of new information, future events or otherwise.

This announcement is for information purposes only and shall not constitute an offer to buy, sell, issue, or subscribe for, or the solicitation of an offer to buy, sell, issue, or subscribe for any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This announcement has been issued by and is the sole responsibility of Rockhopper.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Canaccord Genuity or Merrill Lynch or by any of their respective affiliates or agents as to, or in relation to, the accuracy or completeness of this announcement, including the Appendices, or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

Canaccord Genuity, which is authorised and regulated in the United Kingdom by the FSA, is acting for Rockhopper and for no-one else in connection with the Placing, and will not be responsible to anyone other than Rockhopper for providing the protections afforded to customers of Canaccord Genuity nor for providing advice to any other person in relation to the Placing or any other matter referred to herein.

Merrill Lynch, which is authorised and regulated in the United Kingdom by the FSA, is acting for Rockhopper and for no-one else in connection with the Placing, and will not be responsible to anyone other than Rockhopper for providing the protections afforded to customers of Merrill Lynch nor for providing advice to any other person in relation to the Placing or any other matter referred to herein.

The distribution of this announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by Rockhopper, Canaccord Genuity or Merrill Lynch that would permit an offering of such shares or possession or distribution of this announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by Rockhopper, Canaccord Genuity and Merrill Lynch to inform themselves about, and to observe such restrictions.

The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT PERSONS WHO ARE: (A) (I) INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"), OR (II) PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER, OR (III) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED; AND (B) (I) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS (AS DEFINED IN ARTICLE 2(1)(E) OF EU DIRECTIVE 2003/71/EC (THE "PROSPECTUS DIRECTIVE")), AND/OR (II) PERSONS IN THE UNITED KINGDOM WHO ARE QUALIFIED INVESTORS (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN ROCKHOPPER EXPLORATION PLC.

Persons (including individuals, funds or otherwise) by whom or on whose behalf a commitment to acquire Placing Shares has been given ("Placees") will be deemed to have read and understood this announcement, including the Appendices, in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings contained in Appendix I. In particular, each such Placee represents, warrants and acknowledges that it is: (i) a Relevant Person (as defined above) and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business; (ii) not within the United States; (iii) not within Australia, Canada, South Africa, Japan or any other jurisdiction in which it is unlawful to make or accept an offer to acquire the Placing Shares; (iv) not acquiring the Placing Shares for the account of any person who is located in the United States, unless the instruction to acquire was received from a person outside the United States and the person giving such instruction has confirmed that it has the authority to give such instruction, and that either (a) it has investment discretion over such account or (b) it is an investment manager or investment company and, in the case of each of (a) and (b), that it is acquiring the Placing Shares in an "offshore transaction" (within the meaning of Regulation S under the United States Securities Act of 1933, as amended ("Securities Act"); and (v) it is not acquiring the Placing Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Placing Shares into the United States or any other jurisdiction referred to in (iii) above.

This announcement, including the Appendices, is not for distribution directly or indirectly in or into the United States (including its territories and possessions, any State of the United States and the District of Columbia), Canada, Australia, South Africa or Japan or any jurisdiction into which the same would be unlawful. This announcement is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. No offering of securities will be made in the United States by Rockhopper in connection with the Placing.

This announcement does not constitute or form part of an offer or solicitation to purchase or subscribe for shares in the capital of Rockhopper in Canada, Australia, South Africa or Japan or any jurisdiction in which such an offer or solicitation is unlawful. No public offering of securities of Rockhopper will be made in connection with the Placing in the United Kingdom or elsewhere.

The relevant clearances have not been, and nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the Placing Shares have not been, and nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Canada, Australia, South Africa or Japan. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Canada, Australia, South Africa or Japan or any other jurisdiction outside the United Kingdom.

The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any State securities commission or any other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this announcement. Any representation to the contrary is unlawful.

This announcement relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority ("DFSA"). This announcement is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this announcement nor taken steps to verify the information set forth herein and has no responsibility for this announcement. The Placing Shares to which this announcement relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the Placing Shares offered should conduct their own due diligence on the Placing Shares. If you do not understand the contents of this announcement you should consult an authorised financial adviser.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of the Appendices or this announcement should seek appropriate advice before taking any action.

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the London Stock Exchange. Neither the content of Rockhopper's website nor any website accessible by hyperlinks on Rockhopper's website is incorporated in, or forms part of, this announcement.

APPENDIX I

TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING

Details of the Placing

The Joint Bookrunners have entered into an agreement with Rockhopper (the "Placing Agreement") under which, subject to the conditions set out in that agreement, the Joint Bookrunners have agreed to use reasonable endeavours to procure subscribers for the Placing Shares at a price determined following completion of the bookbuilding process in respect of the Placing (the "Bookbuild"), described in this announcement and set out in the Placing Agreement.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares including the right to receive all dividends and other distributions declared in respect of such ordinary shares after the date of issue of the Placing Shares.

Application for admission to trading

Application will be made to the London Stock Exchange for admission of the Placing Shares to trading on AIM. Admission is conditional upon the passing of the Resolution at the General Meeting proposed to be convened on or around 5 November 2010 by the shareholders of the Company. It is expected that Admission will become effective on or around 8 November 2010 and that dealings in the Placing Shares will commence at that time.

Bookbuild

The Joint Bookrunners will today commence the Bookbuild to determine demand for participation in the Placing by Placees. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.

The Joint Bookrunners and Rockhopper shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their sole discretion, determine.

Participation in, and principal terms of, the Placing:

1. Canaccord Genuity and Merrill Lynch are acting as joint bookrunners and agents of Rockhopper.

2. Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by the Joint Bookrunners. The Joint Bookrunners and their affiliates are each entitled to enter bids in the Bookbuild as principal.

3. The Bookbuild will establish a single price payable to the Joint Bookrunners by all Placees whose bids are successful (the "Placing Price"). The Placing Price and the number of Placing Shares to be issued will be agreed between the Joint Bookrunners and Rockhopper following completion of the Bookbuild. The Placing Price and the number of Placing Shares will be announced on a Regulatory Information Service following the completion of the Bookbuild.

4. To bid in the Bookbuild, Placees should communicate their bid by telephone to their usual sales contact at either of the Joint Bookrunners. Each bid should state the number of Placing Shares which the prospective Placee wishes to subscribe for at either the Placing Price, which is ultimately established by Rockhopper and the Joint Bookrunners, or at prices up to a price limit specified in its bid. Bids may be scaled down by the Joint Bookrunners on the basis referred to in paragraph 9 below.

5. The Bookbuild is expected to close no later than 4.30 p.m. (London time) on 19 October 2010 but may be closed earlier or later at the discretion of the Joint Bookrunners. The Joint Bookrunners may, in agreement with Rockhopper, accept bids that are received after the Bookbuild has closed. Rockhopper reserves the right (upon the agreement of the Joint Bookrunners) to reduce or seek to increase the amount to be raised pursuant to the Placing, in its absolute discretion.

6. Each prospective Placee's allocation will be agreed between the Joint Bookrunners and Rockhopper and will be confirmed orally by one of the Joint Bookrunners as agent of Rockhopper following the close of the Bookbuild. That oral confirmation will constitute an irrevocable legally binding commitment upon that person (who will at that point become a Placee) in favour of the Joint Bookrunners and Rockhopper to subscribe for the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with Rockhopper's articles of association.

7. Each prospective Placee's allocation and commitment will be evidenced by a contract note issued to such Placee by one of the Joint Bookrunners. The terms of this Appendix will be deemed incorporated in that contract note.

8. Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to Rockhopper and the relevant Joint Bookrunner as agent of Rockhopper, to pay the relevant Joint Bookrunner (or as it may direct) in cleared funds, an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to subscribe and Rockhopper has agreed to allot and issue to that Placee.

9. The Joint Bookrunners may choose to accept bids, either in whole or in part, on the basis of allocations determined in agreement with Rockhopper and may scale down any bids for this purpose on such basis as they may determine. The Joint Bookrunners may also, notwithstanding paragraphs 4 and 5 above, subject to the prior consent of Rockhopper (i) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time and (ii) allocate Placing Shares after the Bookbuild has closed to any person submitting a bid after that time.

10. A bid in the Bookbuild will be made on the terms and subject to the conditions in this announcement and will be legally binding on the Placee on behalf of which it is made and except with the consent of either of the Joint Bookrunners will not be capable of variation or revocation after the time at which it is submitted.

11. Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under "Registration and Settlement".

12. All obligations under the Bookbuild and Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below.

13. By participating in the Bookbuild, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

14. To the fullest extent permissible by law, neither of the Joint Bookrunners nor any of their affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither of the Joint Bookrunners nor any of their affiliates shall have any liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of the Joint Bookrunner's conduct of the Bookbuild or of such alternative method of effecting the Placing as the Joint Bookrunners and Rockhopper may agree.

Conditions of the Placing

The obligations of the Joint Bookrunners under the Placing Agreement are conditional on, amongst other things:

(a) agreement being reached between Rockhopper and the Joint Bookrunners on the Placing Price and the number of Placing Shares;

(b) publication by Rockhopper of an announcement of the Placing Price;

(c) the passing of the Resolution, without amendment, at the General Meeting of the Company to be convened on or around 5 November 2010;

(d) Admission taking place by 8.00 a.m. (London time) on 8 November 2010 (or such later date as Rockhopper and the Joint Bookrunners may otherwise agree); and

(e) the Placing Agreement becoming unconditional in all other respects.

If any of the conditions contained in the Placing Agreement in relation to the Placing Shares are not fulfilled or waived by the Joint Bookrunners, by the respective time or date where specified (or such later time and/or date as Rockhopper and the Joint Bookrunners may agree), the Placing will not proceed and the Placee's rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.

The Joint Bookrunners may, at their discretion and upon such terms as they think fit, waive compliance by Rockhopper with the whole or any part of any of Rockhopper's obligations in relation to the conditions in the Placing Agreement save that the conditions in the Placing Agreement relating to Admission taking place may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this announcement.

None of the Joint Bookrunners, Rockhopper or any other person shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and / or the date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally, and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Joint Bookrunners.

The Placing Agreement may be terminated by the Joint Bookrunners at any time prior to Admission in certain circumstances including, among other things, following a breach of the Placing Agreement by the Company or the occurrence of certain force majeure events.

Upon such termination, the parties to the Placing Agreement shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing Agreement subject to certain exceptions.

By participating in the Placing, Placees agree that the exercise by the Joint Bookrunners of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of the Joint Bookrunners and that they need not make any reference to Placees and that they shall have no liability to Placees whatsoever in connection with any such exercise or failure so to exercise.

No prospectus

No offering document, prospectus or admission document has been or will be submitted to be approved by the FSA or submitted to the London Stock Exchange in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in this announcement (including the Appendices) released by Rockhopper today and any information previously published by Rockhopper by notification to a Regulatory Information Service, and subject to the further terms set forth in the contract note to be provided to individual prospective Placees.

Each Placee, by accepting a participation in the Placing, agrees that the content of this announcement (including the Appendices) is exclusively the responsibility of Rockhopper and confirms that it has neither received nor relied on any other information (other than any information previously published by Rockhopper by notification to a Regulatory Information Service), representation, warranty, or statement made by or on behalf of Rockhopper or the Joint Bookrunners or any other person and none of the Joint Bookrunners or Rockhopper nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of Rockhopper in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Registration and settlement

Settlement of transactions in the Placing Shares following Admission will take place within the system administered by Euroclear UK & Ireland Limited ("CREST"), subject to certain exceptions. Rockhopper reserves the right to require settlement for and delivery of the Placing Shares (or a portion thereof) to Placees in certificated form if, in the Joint Bookrunners' opinion, delivery or settlement is not possible or practicable within the CREST system or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

Following the close of the Bookbuild for the Placing, each Placee allocated Placing Shares in the Placing will be sent a contract note stating the number of Placing Shares to be allocated to it at the Placing Price and settlement instructions.

Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions that it has in place with the Joint Bookrunners. Rockhopper will deliver the Placing Shares to CREST accounts operated by each of the Joint Bookrunners as agents for Rockhopper, and the Joint Bookrunners will enter their respective delivery (DEL) instruction into the CREST system. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment.

It is expected that settlement will take place on 8 November 2010, being the business day following the General Meeting, on a delivery versus payment basis.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by the Joint Bookrunners.

Each Placee is deemed to agree that, if it does not comply with these obligations, Rockhopper may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for Rockhopper's account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Representations and warranties

By participating in the Placing each Placee (and any person acting on such Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents, warrants and agrees (as the case may be) with each of the Joint Bookrunners (in their capacity as underwriters of the Placing Shares and joint bookrunners and placing agents of the Company in respect of the Placing) and the Company, in each case as a fundamental term of their application for Placing Shares the following:

1. it has read this announcement, including the appendices, in its entirety;

2. that (i) no offering document, listing particulars, prospectus or admission document has been or will be prepared in connection with the Placing and (ii) it has not received a prospectus, admission document or other offering document in connection with the Bookbuild, the Placing or the Placing Shares;

3. that the Ordinary Shares are admitted to trading on AIM, and Rockhopper is therefore required to publish certain business and financial information in accordance with the rules and practices of AIM (collectively, the "Exchange Information"), which includes a description of the nature of Rockhopper's business and Rockhopper's most recent balance sheet and profit and loss account and that it is able to obtain or access (i) such Exchange Information and (ii) such information or comparable information concerning any other publicly traded company, in each case without undue difficulty;

4. that none of the Joint Bookrunners or Rockhopper nor any of their affiliates nor any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares or Rockhopper or any other person other than this announcement; nor has it requested any of the Joint Bookrunners, Rockhopper, any of their affiliates or any person acting on behalf of any of them to provide it with any such information;

5. acknowledges that the Placing Shares have not been and will not be registered under the securities legislation of the United States, Australia, Canada, South Africa or Japan and, subject to certain exceptions, may not be offered, sold, transferred, delivered or distributed, directly or indirectly, in or into those jurisdictions;

6. that (i) it is not within the United States; (ii) it is not within Australia, Canada, South Africa, Japan or any other jurisdiction in which it is unlawful to make or accept an offer to acquire the Placing Shares; (iii) it is not acquiring the Placing Shares for the account of any person who is located in the United States, unless the instruction to acquire was received from a person outside the United States and the person giving such instruction has confirmed that it has the authority to give such instruction, and that either (a) it has investment discretion over such account or (b) it is an investment manager or investment company and, in the case of each of (a) and (b), that it is acquiring the Placing Shares in an "offshore transaction" (within the meaning of Regulation S under the Securities Act); and (iv) it is not acquiring the Placing Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Placing Shares into the United States or any other jurisdiction referred to in (ii) above;

7. that the content of this announcement is exclusively the responsibility of Rockhopper and that neither of the Joint Bookrunners nor any person acting on their behalf has or shall have any liability for any information, representation or statement contained in this announcement or any information previously published by or on behalf of Rockhopper and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this announcement or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to subscribe for the Placing Shares is contained in this announcement and any information previously published by Rockhopper by notification to a Regulatory Information Service, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by any of the Joint Bookrunners or Rockhopper and none of the Joint Bookrunners or Rockhopper will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of Rockhopper in deciding to participate in the Placing;

8. that neither of the Joint Bookrunners nor any person acting on behalf of them nor any of their affiliates has or shall have any liability for any publicly available or filed information, or any representation relating to Rockhopper, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

9. that neither it, nor the person specified by it for registration as a holder of Placing Shares is, or is acting as nominee or agent for, and that the Placing Shares will not be allotted to, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary receipts and clearance services);

10. that it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering Regulations 2007 (the "Regulations") and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;

11. that it is acting as principal only in respect of the Placing or, if it is acting for any other person (i) it is duly authorised to do so, (ii) it is and will remain liable to the Company and/or the Joint Bookrunners for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person), (iii) it is both an "authorised person" for the purposes of FSMA and a "qualified investor" as defined at Article 2.1(e)(i) of Directive 2003/71/EC (known as the Prospectus Directive) acting as agent for such person, and (iv) such person is either (1) a "qualified investor" as referred to at section 86(7) of FSMA or (2) a "client" (as defined in section 86(2) of FSMA) of its that has engaged it to act as such client's agent on terms which enable it to make decisions concerning the Placing or any other offers of transferable securities on such client's behalf without reference to such client;

12. that, if a financial intermediary, as that term is used in Article 3(2) of EU Directive 2003/71/EC (the "Prospectus Directive") (including any relevant implementing measure in any member state), the Placing Shares purchased by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a member state of the European Economic Area which has implemented the Prospectus Directive other than to qualified investors, or in circumstances in which the prior consent of the Joint Bookrunners has been given to the proposed offer or resale;

13. that it has not offered or sold and, prior to the expiry of a period of six months from Admission, will not offer or sell any Placing Shares to persons in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the Financial Services and Markets Act 2000 ("FSMA");

14. that it has not offered or sold and will not offer or sell any Placing Shares to persons in the European Economic Area prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the European Economic Area within the meaning of the Prospectus Directive (including any relevant implementing measure in any member state);

15. that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

16. that it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;

17. that (i) it is a person falling within Article 19(5) and / or Article 49(2)(a) to (d) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or is a person to whom this announcement may otherwise be lawfully communicated; and (ii) any offer of Placing Shares may only be directed at persons to the extent in member states of the European Economic Area who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC) and represents and agrees that it is such a qualified investor;

18. that it is entitled to purchase the Placing Shares under the laws of all relevant jurisdictions which apply to it, and that its subscription/purchase of the Placing Shares will be in compliance with applicable laws and regulations in the jurisdiction of its residence, the residence of the Company, or otherwise;

19. that it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with this announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers or sold as the Joint Bookrunners may in their discretion determine and without liability to such Placee;

20. that its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares which it will be entitled, and required, to subscribe for, and that Rockhopper may call upon it to subscribe for a lower number of Placing Shares (if any), but in no event in aggregate more than the aforementioned maximum;

21. that neither of the Joint Bookrunners, nor any of their respective affiliates, nor any person acting on behalf of either of them, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of either Joint Bookrunner and that the Joint Bookrunners have no duties or responsibilities to it for providing the protections afforded to their clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

22. that the person whom it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. Neither of the Joint Bookrunners or Rockhopper will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify Rockhopper and the Joint Bookrunners in respect of the same on the basis that the Placing Shares will be allotted to the CREST stock accounts of the Joint Bookrunners who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;

23. that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions and any non-contractual obligations arising out of or in connection with such agreements shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by Rockhopper or the Joint Bookrunners in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;

24. that the Company, Canaccord Genuity and Merrill Lynch will rely upon the truth and accuracy of the representations, warranties and acknowledgements set forth herein and which are irrevocable and it irrevocably authorises the Company, Canaccord Genuity and Merrill Lynch to produce this announcement, pursuant to, in connection with, or as may be required by any applicable law or regulation, administrative or legal proceeding or official inquiry with respect to the matters set forth herein;

25. that it will indemnify and hold Rockhopper, the Joint Bookrunners and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix I and further agrees that the provisions of this Appendix I shall survive after completion of the Placing;

26. that it will acquire any Placing Shares purchased by it for its account or for one or more accounts as to each of which it exercises sole investment discretion and it has full power to make the acknowledgements, representations and agreements herein on behalf of each such account;

27. that its commitment to subscribe for Placing Shares on the terms set out herein and in the contract note will continue notwithstanding any amendment that may in future be made to the terms of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to Rockhopper's conduct of the Placing. The foregoing representations, warranties and confirmations are given for the benefit of Rockhopper as well as the Joint Bookrunners. The agreement to settle a Placee's subscription (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to the subscription by it and/or such person direct from Rockhopper for the Placing Shares in question. Such agreement assumes, and is based on a warranty from each Placee, that neither it, nor the person specified by it for registration as holder, of Placing Shares is, or is acting as nominee or agent for, and that the Placing Shares will not be allotted to, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary receipts and clearance services). If there are any such arrangements, or the settlement relates to any other dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable. In that event the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax, and neither Rockhopper nor the Joint Bookrunners shall be responsible for such stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify the Joint Bookrunners accordingly;

28. that no action has been or will be taken by any of the Company, the Joint Bookrunners or any person acting on behalf of Rockhopper or the Joint Bookrunners that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required;

29. that, in making any decision to purchase the Shares, it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for or purchasing the Placing Shares. It further confirms that it is experienced in investing in securities of this nature in this sector and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain a complete loss in connection with the Placing. It further confirms that it relied on its own examination and due diligence of the Company and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved;

30. that it has (i) made its own assessment and satisfied itself concerning legal, regulatory, tax, business and financial considerations in connection herewith to the extent it deems necessary; (ii) had access to review publicly available information concerning the Rockhopper group that it considers necessary or appropriate and sufficient in making an investment decision; (iii) reviewed such information as it believes is necessary or appropriate in connection with its subscription or purchase of the Placing Shares; and (iv) made its investment decision based upon its own judgement, due diligence and analysis and not upon any view expressed or information provided by or on behalf of Canaccord Genuity and Merrill Lynch;

31. that it may not rely on any investigation that Canaccord Genuity and Merrill Lynch or any person acting on their behalf may or may not have conducted with respect to the Company, its group, or the Placing and Canaccord Genuity and Merrill Lynch have not made any representation to it, express or implied, with respect to the merits of the Placing, the subscription or purchase of the Placing Shares, or as to the condition, financial or otherwise, of the Company, its group, or as to any other matter relating thereto, and nothing herein shall be construed as a recommendation to it to purchase the Placing Shares. It acknowledges and agrees that no information has been prepared by Canaccord Genuity, Merrill Lynch or the Company for the purposes of this Placing;

32. that accordingly it will not hold Canaccord Genuity or Merrill Lynch, any of their respective associates or any person acting on their behalf responsible or liable for any misstatements in or omission from any publicly available information relating to the Company's group or information made available (whether in written or oral form) in presentations or as part of roadshow discussions with investors relating to the Company's group (the "Information") and that none of Canaccord Genuity, Merrill Lynch or any person acting on behalf of Canaccord Genuity or Merrill Lynch, makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of such Information or accepts any responsibility for any of such Information; and

33. that in connection with the Placing, each of Canaccord Genuity, Merrill Lynch and any of their respective affiliates acting as an investor for its own account may take up shares in the Company and in that capacity may retain, purchase or sell for its own account such shares in the Company and any securities of the Company or related investments and may offer or sell such securities or other investments otherwise than in connection with the Placing. Accordingly, references in this announcement to shares being issued, offered or placed should be read as including any issue, offering or placement of such shares in the Company to any of Canaccord Genuity, Merrill Lynch and any relevant affiliate acting in such capacity. Neither Canaccord Genuity nor Merrill Lynch intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

By participating in the Placing, each Placee (and any person acting on Placee's behalf) subscribing for Placing Shares acknowledges that: (i) the Placing Shares are being offered and sold only pursuant to Regulation S under the Securities Act in a transaction not involving a public offering of securities in the United States and the Placing Shares have not been and will not be registered under the Securities Act; and (ii) the offer and sale of the Placing Shares to it has been made outside of the United States in an "offshore transaction" (as such term is defined in Regulation S under the Securities Act) and it is outside of the United States during any offer or sale of Placing Shares to it.

In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the United Kingdom by them or any other person on the subscription by them of any Placing Shares or the agreement by them to subscribe for any Placing Shares.

Each Placee and any person acting on behalf of each Placee acknowledges and agrees that the Joint Bookrunners or any of their affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares.

When a Placee or person acting on behalf of the Placee is dealing with the Joint Bookrunners, any money held in an account with any of the Joint Bookrunners on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FSA made under FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from the relevant Joint Bookrunners' money in accordance with the client money rules and will be used by the relevant Joint Bookrunners in the course of their own business; and the Placee will rank only as a general creditor of the Joint Bookrunners.

All times and dates in this announcement may be subject to amendment. The Joint Bookrunners shall notify the Placees and any person acting on behalf of the Placees of any changes.

Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

APPENDIX II

RISK FACTORS

Investors and prospective investors should consider carefully whether an investment in Rockhopper is suitable for them.

The risks and uncertainties summarised below may not be the only ones facing the Group. Additional risks and uncertainties not currently known to the Company or that the Company deems immaterial may also impair the Group's business operations. The Group's business, prospects, financial condition and results of operations could be materially and adversely affected by any of these risks.

THE FALKLAND ISLANDS

The Falkland Islands' royalty and tax regime applicable to the Group is untested and may change.

The Falkland Islands government has stated that it is committed to ensuring that its tax regime remains attractive and conducive to attracting future investment. However, no assurance can be given that its fiscal policy will remain unchanged. In particular, it is possible that the discovery of oil in its waters could prompt the Falkland Islands government to consider increasing the amount of royalties or other taxation that oil and gas production companies will be required to be pay on their production or profits, or both.

The North Falkland Basin is an exploration frontier at the end of a long supply chain.

The Group's exploration acreage is all in the North Falkland Basin, which is largely unexplored. No wells have been drilled there except for six in 1998 and for the four wells drilled so far this year. The Falkland Islands are approximately 650 kilometres off the south-eastern tip of South America. The Group is dependent on flights from the UK and from Punta Arenas, Chile's southernmost city, for the transportation of personnel and equipment to the Falkland Islands. Any equipment that is too large or heavy to transport by air must be transported by sea. Sailing time to the Falkland Islands from the UK is approximately 30 days. Any significant disruption to the Group's air or sea access to the Falkland Islands could prevent the timely transportation of personnel and equipment necessary for the Group's operations. Any delays could result in increased costs and could severely disrupt the Group's activities.

The flight of approximately 8,000 miles from the UK to the Falkland Islands via the Ascension Islands gives rise to number of logistical risks. The most significant relates to the well-being and safety of drilling rig personnel should they arrive on the rig fatigued following the long journey from the UK. Whilst the safety of personnel is paramount, no assurance can be given that fatigue related accidents will not occur or that insurance will adequately cover any losses or that the Company will not be found liable for claims arising from such accidents. The weekly civilian flight from Punta Arenas currently passes through Argentinean airspace. On occasion, Argentina has refused civilian flights bound for the Falkland Islands permission to use its airspace, resulting in the suspension of the only scheduled commercial flights to the Falkland Islands from the South American continent. The Falkland Islands are served by the military airbase at RAF Mount Pleasant that is located about 30 miles from Stanley, the capital. The runway is subject to maintenance work which is scheduled for completion in January 2011. Until this work is completed, civilian air traffic movements are restricted to one 36 hour period a week. Even in these periods military business takes priority. This could result in the cancellation of civilian flights or the withdrawal of seats allocated to civilians on military flights with little or no warning, leaving passengers with no means of reaching their destination for a week or more.

Uncertainty about the application of Falkland Islands law to the Group could

adversely affect the Group.

The Company regularly consults with the Falkland Islands government and its Falkland legal advisers on the application of Falkland Islands legislation applicable to the Group. None of it has yet been tested in relation to any appraisal or development activities that the Group might subsequently carry out. The application to the Group of a number of important legislative provisions is uncertain. This uncertainty gives rise to a risk that the Group may not be compliant with applicable laws through no fault of its own or that it may need to incur significant costs at a later stage in order to adapt or change aspects of its exploration and developments programmes to ensure that it is complaint with applicable laws.

The Falkland Islands' sovereign status is disputed by Argentina.

The Group has been granted all of its exploration and production licences by the government of the Falkland Islands, a self-governing overseas territory of the United Kingdom. The government of the Republic of Argentina does not recognise the Falkland Islands government and claims sovereignty to the Falkland Islands for itself. The United Nations have requested that the issue of sovereignty be resolved as soon as possible through the resumption of negotiations between the Argentinean and the UK governments. Negotiations have not resumed. The UK government maintains that any issue over sovereignty is a matter for the inhabitants of the Falkland Islands alone to determine. Any change to the current position in Argentina's favour regarding the sovereignty of the Falkland Islands could have a severe impact on the Group. Earlier this year the Argentinean government issued new shipping controls requiring all vessels sailing to and from Argentina, the Falkland Islands, South Georgia and the South Sandwich Islands to request prior authorisation from the Argentine government. The UK government has rejected these new measures. The continued presence of a significant British military garrison in the Falkland Islands suggests that the possibility of armed conflict in the region cannot be completely ruled out. Whilst the board does not anticipate that this sovereignty dispute will lead to open aggression, it believes that there is a risk that some potential suppliers may choose not to contract with the Group in case an association on their part through the Group with the Falkland Islands has a detrimental effect on their own business interests in Argentina or possibly elsewhere in South America.

OIL AND GAS EXPLORATION

Oil and gas exploration is speculative, capital intensive and can result in complete loss.

Exploring for hydrocarbon resources and reserves and then developing them into commercial production is a highly speculative and capital intensive activity involving very high degrees of risk. These risks include encountering unusual or unexpected geological formations or pressures, seismic shifts, unexpected reservoir behaviour, unexpected or different fluids or fluid properties, premature decline of reservoirs, uncontrollable flow of oil, natural gas or well fluids, equipment failures, extended interruptions due to (among other things) adverse weather conditions, environmental hazards, industrial accidents, lack of availability of exploration and production equipment, explosions, pollution, oil seepage, industrial action and shortages of manpower. Encountering any of these can greatly

increase operational costs of operations. Oil and gas exploration and appraisal projects often involve unprofitable efforts, either from dry wells or from wells that are productive but do not produce sufficient net revenues to return a profit after development, operating and other costs. Such projects can result in complete failure and a total loss of all investment in them. Completion of a well does not guarantee a profit on the investment or recovery of the costs associated with that well. Drilling hazards or environmental damage can greatly increase the cost of operations. Extreme weather, adverse geological conditions and other field operating conditions may delay drilling or appraisal activities and can also increase costs.

The Group is dependent on the availability of equipment and services from third

parties in order to carry out its activities.

The Company is heavily dependent on services and equipment provided by third-parties. These include seismic commissioning and the hiring of drilling rigs, third party experts and technical consultants. Such services and equipment, especially drilling rigs, can be scarce and may not be readily available when required whilst the costs of third party services and equipment are subject to change. A shortage of equipment and services can be caused by any significant increase in regional exploration and development activities. These, in turn, could result from oil or gas prices increasing or remaining at high levels. The scarcity of drilling rigs or other equipment or services could impact on the viability of the Group's exploration and development projects. The Company has yet to hire an oil rig for the next stages of its drilling programme that is described in this announcement. The remote location of the Group's operation limits the availability of suitable oil rigs for this purpose. Ultimately, were the Group to be unable to hire a drilling rig on suitable terms, it would not proceed with the next stage of its drilling programme for some time and might be unable to meet its drilling commitments to the Falkland Island government. This could put it at risk of forfeiting the relevant production licences.

Oil and gas exploration can be delayed or adversely affected by numerous factors.

The Group's exploration activities, and any subsequent development and production activities, may be delayed or adversely affected by numerous factors. These include compliance with governmental requirements, shortages or delays in installing and commissioning plant and equipment and import and customs delays. Problems may also arise due to the quality or failure of locally obtained equipment or interruptions to services (such as power, water, fuel or transport or processing capacity) or technical support resulting in a requirement for greater expenditure or in failure to achieve expected target dates for exploration (or development or production) or to achieve anticipated flow rates. Substantial operational risks are involved in drilling for oil and gas and in the development and operation of oil or gas fields. These including blow-outs, cratering, explosions, pollution, seepage or leaks, fires, earthquake activity, unusual or unexpected geological conditions and other hazards which can delay, or ultimately prevent, the exploitation of such fields. They could also result in cost overruns or substantial losses to the Group due to environmental pollution or damage, personal injury or loss of life, clean up responsibilities, regulatory investigation and penalties or suspension of operations. Such hazards could also severely damage or destroy equipment or the property of third parties.

The Group does not have any oil or gas reserves. It will never do so unless it is able to develop commercially its contingent and prospective resources.

The Group does not have any oil or gas assets that are, or can be treated as, commercially recoverable "reserves" in accordance with industry standards. Whilst the board is optimistic about the Group's prospects for acquiring oil reserves no assurance can be given that the Group will actually do so. "Contingent resources" are quantities of hydrocarbons estimated to be recoverable from locations where a significant amount of hydrocarbons of reasonable quality has been discovered. The Group's resources attributable to its Sea Lion discovery are contingent resources for this purpose. "Prospective resources" are merely estimates of what oil or gas might potentially be recoverable from the location concerned at which no oil or gas has actually been found. The Group's existing contingent and prospective resources may not be commercially recoverable. This is for a variety of reasons, including the high costs involved in recovering contingent resources, the possibility of a significant fall in the price of oil and limits on the availability of suitable funding for the Group's appraisal and development activities.

The Company's success depends on its ability to appraise, find, acquire, develop and produce oil and gas reserves that are economically recoverable.

The Company's long-term commercial success depends on its ability to appraise, find, acquire, develop and commercially produce oil and gas reserves. There are many reasons why the Company may not be able to find or acquire oil and gas reserves or develop them for commercially viable production.

The Group's environmental and health and safety liabilities could be significant.

The Group is subject to a wide variety of laws, regulations and permit requirements. Many of these relate to the protection of human health, safety and the environment. Failure to observe or comply with these laws and regulations could result in the Group having to modify its operations, install pollution control equipment, perform site clean-ups, curtail or cease operations or pay fees or fines or make other payments for pollution, discharges or other breaches of environmental requirements. Any of these could adversely effect the Group or its prospects. The board expects the Group's capital expenditure for compliance with environmental and health and safety laws and regulations to increase substantially over time as a result of the Group's new and increasing exploration and development activities. No assurance can be given that the Group will be able to maintain, extend or renew its licences and permits. Increased expenditure to comply with environmental regulations, mitigate the environmental impact of the Group's operations or restore the biological and geological characteristics of the areas in which the Group operates may curtail the Company's ability to make strategic investments. Certain health and safety and environmental laws provide for strict joint and several liability for persons participating together on a joint venture basis in oil and gas exploration, regardless of fault, for natural resource damages and for remediation and clean-up costs of spills and other releases of hazardous substances. Such laws may impose liability for personal injury or property damage as a result of exposure to hazardous substances or expose a faultless party to liability for the conduct of others (such as the operator of a production licence in which the Group has a passive, minority interest) or for past acts that complied with all applicable laws when they were performed.

Oil exploration may cause damage to persons, property and the environment for which the Group may not be adequately insured

Exploration for oil carries inherent risks. The Group's activities present several risks such as those of spills, explosions in pipelines and drilling wells and natural and geological disasters. The occurrence of any of these events or other accidents could result in personal injuries, loss of life, severe environmental damage with the resulting containment, clean-up and repair expenses, equipment damage and liability in civil proceedings. The recent Macondo incident in the Gulf of Mexico has already led to higher insurance costs for the oil and gas exploration and production industry as a whole, including an increase in the OPOL (oil pollution compensation scheme) limits of liability that apply to operators in the United Kingdom Continental Shelf. There is a risk that insurance costs may increase further, but it is not possible to predict the level of any increase. The Group's insurance policies may not cover all liabilities, and insurance may not be available for all risks. In certain circumstances, the Company may elect not to obtain insurance to deal with specific events due to the high premiums associated with such insurance or for other reasons. Additionally, insurers may attempt to mitigate their losses which may, in turn, cause delay in any action the Company is required to take. For example, should the Company need a second drilling rig to drill a relief well, it is likely that such a rig would be offered by its owner to the Company at higher 'distressed' rates. Such rates may result in the insurer delaying any relief drilling activity in order to negotiate more favourable hire rates. There can be no assurance that accidents will not occur, that insurance will adequately cover the entire scope or extent of any losses, or that the Group will have or be able to obtain insurance, or that a Group company will not be found liable in connection with claims arising from these and other events. Operational insurance policies are usually placed in one-year insurance contracts and the insurance market can withdraw cover for certain risks which can greatly increase the costs of risk transfer. Such increases are often driven by factors unrelated to the Company such as well control elsewhere in the world and wind storm damage.

Oil and gas prices fluctuate and can fall by large amounts.

The viability of the Group's exploration business is ultimately subject to the prevailing prices of oil and gas. Oil and gas prices are very volatile and have, historically, been subject to wide fluctuations as a result of, for example:

- global economic, military and geopolitical developments;

- economic, military and geopolitical developments in crude oil producing regions, particularly in the Middle East;

- the ability of the Organisation of Petroleum Exporting Countries (OPEC), the consortium of 12 oil producing nations in Africa, the Middle East and South America that accounts for approximately two-thirds of all proven oil reserves and one-third of global oil production, to set and maintain crude oil production levels and defend prices;

- market uncertainty and speculative activities by those who buy and sell oil and gas on the world market;

- access to pipelines, tanker ships, other means of transporting oil, gas and petroleum products and refining capacity;

- global and regional supply and demand, and expectations regarding future supply and demand, for oil and gas;

- global financial crises, such as the global financial crisis of 2008;

- competition from other energy sources;

- prices and availability of new technologies;

- weather conditions and natural disasters; and

- domestic and foreign governmental regulations and actions, including the imposition of export restrictions and taxes.

It is impossible to predict future movements in the price of oil and gas. No assurance can be given that existing prices will be maintained at current levels. Whilst the Group does not yet produce any oil (and has no current expectation of producing gas) the economics of producing from any oil field that it might develop may change as a result of lower prices such that it might no longer be economically viable to operate, or to plan operating, any oil well there.

THE GROUP'S OPERATIONS

Estimates of the volumes of the Group's resources are illustrative only. They cannot be relied on as a forecast of the amount of any oil or gas reserves that the Group might acquire or establish.

There are numerous uncertainties inherent in estimating hydrocarbon resources. Estimating the volume of resources is a subjective interpretative process based on a number of variable factors and assumptions, including the expected characteristics of the relevant reservoir and interpretation of geological and geophysical data. Estimates that are reasonable when made may have to be changed significantly when new information from additional exploration or appraisal activity becomes available. It is normal practice to assign a range to the volume estimates because of the uncertainty over exactly how large a discovery or prospect might be. Estimating the range is normally undertaken in a probabilistic way, using a range for each input parameter to derive a range for the output volumes. Key contributing factors to the overall uncertainty are data uncertainty, interpretation uncertainty and model uncertainty. Accordingly, the Group's estimates are, of their very nature, indicative only. None of them purports to be, or can be relied on as being, a forecast of any reserves that the Group may subsequently acquire or establish.

The Company will need to raise more money in the equity capital markets if it is to

become a production company.

The board expects the Group to spend most of the net proceeds of the Placing within 18 months following its completion. The Company will then require a substantial amount of additional financing to pursue existing or new exploration and development plans that it must put in place if it is ever to become an oil producer. The Company is likely to raise this finance, subject to prevailing market conditions, through the issue of new shares and it is possible that it will do so on more than once. However, there is no assurance that the Company will be successful in doing so on acceptable terms at the relevant time or at all.

The Group is vulnerable to risks associated with operating in just one geographic

area.

The Group's operations are narrowly focussed on a small number of prospects in just one area, the North Falkland Basin. As a result, the Group is disproportionately exposed to the impact of delays or interruptions affecting the Falkland Islands or the North Falkland Basin caused by transportation, availability of equipment, facilities, personnel or services, significant governmental regulation, natural disasters or adverse weather conditions.

The Group is subject to counterparty risk and bank default risk.

The Group is likely to be subject to one or more significant contracts, such as a rig hire contract, under which it is required to make substantial advanced payments to other parties. As a result the Company is likely to be subject to the risk of counterparty default. Much of the money to be raised through the Placing is likely to be placed on bank or money market deposit for several months. Recent credit market events have demonstrated the possibility of banks, previously thought to be secure, defaulting on their deposits. No more than two thirds of the Company's total cash resources are held at any one time by the same bank. However, two of the banks, with which the Company deposits the majority of its monies are either part or majority owned by the British government.

The Group is not insured against business interruptions.

The Group is not insured for business interruptions. For example, if rig workers were to strike or any key employee or consultant or any group of them were to be absent from the Falkland Islands when needed, the Group would not be insured for the cost of the resulting work stoppages. This cost could be significant as the daily hire charge for an oil rig is usually several hundred thousand US dollars.

The Group is dependent on individual directors and on the services of other high calibre personnel.

The Company is dependent on individual directors, including its executive directors and its chairman. The unexpected loss of services of any such director for any reason could cause a significant fall in the Company's share price. The Company does not have any key person insurance in place to cover the loss of the services of any director or employee. The Group needs to attract and retain suitable skilled staff and consultants to ensure the successful development of its business. However, as there is significant competition for skilled personnel in the upstream oil and gas sector in which the Group operates, the Group may have difficulty in doing so. Any significant failure to do so could hinder or delay the Group's development.

The Company is subject to exchange rate risk.

The Group reports its financial results in US dollars. However the Group incurs significant costs in UK pounds sterling and has always raised funds through share issues in UK pounds sterling. As a result, the Company is exposed to exchange rate fluctuations between the US dollar and the UK pound.

The Company is reliant on Desire as the operator for licences PL003 and PL004.

The Company holds a 7.5 per cent. working interest in production licences PL003 and PL004 in which Desire has a 92.5 per cent interest. The Company is dependent on Desire, as the operator of these licences, for the timing of all exploration activities relating to them. The Company will be largely unable to direct or control the activities of Desire or the costs incurred. In addition, the success of exploration activities in the acreage covered by these licences will be largely dependent on the performance of Desire's staff. Any mismanagement by the operator of any licences in which the Group has a minority, non operational interest could result in significant increased costs for the Company. Whilst the terms of the operating agreement for any such licence will impose certain standards and requirements on the operator, the Group will not be in a position to ensure that they are met and complied with.

ORDINARY SHARES

The market price of the Ordinary Shares may fluctuate in response to a number of factors, many of which are outside the Group's control.

The market price of the Ordinary Shares, including for these purposes the Placing Shares, may fluctuate significantly due to a change in sentiment in the market regarding the Group's business, financial condition or results of operations. Such fluctuations may be influenced by a number of factors beyond the Group's control, including but not limited to, the market's perception of the likelihood that the Placing will complete, actual or anticipated changes in the Group's performance, the expectations and recommendations of analysts who cover the Group's business and industry, regulatory changes, large sales or purchases of the Ordinary Shares (or the perception that such transactions may occur) and general market and economic conditions. Stock markets have from time to time experienced, and have recently experienced, significant price and volume fluctuations that have affected the market prices for securities, and these changes in market prices may have been unrelated to the operating performance or prospects of the businesses to which the securities relate. Stock market conditions are affected by many factors, such as the supply and demand of capital, general economic and political conditions, movements in or outlook on interest rates and inflation rates, currency fluctuations, commodity prices, changes in investor sentiment and terrorist activity. Any of these factors could influence the market price of the Ordinary Shares. For all or any of these reasons, the market price of the Ordinary Shares may go down as well as up. Consequently investors may not recover their original investment and could lose all of it.

Shareholders may be exposed to fluctuations in currency exchange rates.

The existing Ordinary Shares and the Placing Shares are priced in sterling, and will be quoted and traded in sterling. In addition, any dividends that the Group may pay will be declared and paid in sterling. Accordingly, shareholders resident in non-UK jurisdictions are subject to risks arising from adverse movements in the value of their local currencies against sterling, which may reduce the value of the existing Ordinary Shares and the Placing Shares, as well as that of any dividends paid.

It is likely that the Company will issue more shares in the future on a basis that could be dilutive for many shareholders.

It is likely that, for the reason explained above, the Company will need to raise a substantial amount of new financing through the issue of new shares. If the Company decides to do so, such an issue could dilute the interests of many shareholders by a significant amount.

The ability of overseas shareholders to bring actions or enforce judgments against the Company or the directors may be limited.

The ability of an overseas shareholder to bring an action against the Company may be limited under law. The Company is a public limited company incorporated in England and Wales. The rights of holders of the Ordinary Shares are governed by English law and by the Company's articles of association. These rights differ from the rights of shareholders in typical US corporations and some other non-UK corporations. In particular, even though the UK Companies Act 2006 has prescribed a range of circumstances under which shareholders of companies may bring derivative actions, English law significantly limits such circumstances. Under English law generally, only a company can be the proper pursuer or claimant in proceedings in respect of wrongful acts committed against it. In addition, it may be difficult for an overseas shareholder to prevail in a claim against the Company or to enforce liabilities predicated on foreign securities laws. An overseas shareholder may not be able to enforce a judgment against some or all of the Directors. All the current Directors are residents of the United Kingdom. Consequently, it may not be possible for an overseas shareholder to effect service of process on the Directors within the overseas shareholder's country of residence or to enforce against the Directors judgments of courts of the overseas shareholder's country of residence based on civil liabilities under that country's securities laws. Overseas shareholders may be unable to enforce any judgments in civil and commercial matters or any judgments under the securities laws of countries outside the United Kingdom against the Directors who are residents of the United Kingdom or countries other than those in which a judgment is made. In addition, English or other courts may not impose civil liability on the Directors in any original action based solely on foreign securities laws brought against the Company or the directors in a court of competent jurisdiction in England or other countries.

The Placing Shares will be admitted to trading on AIM.

The Ordinary Shares are admitted to trading only on the London Stock Exchange's AIM market. Application will be made for the Placing Shares to be admitted to trading on AIM. AIM is designed primarily for emerging or smaller companies to which a higher investment risk tends to be attached than to larger or more established companies. An investment in shares traded on AIM is generally considered to carry a higher degree of risk than an investment in shares that are admitted to trading on the London Stock Exchange's main market.

DEFINITIONS

Terms not otherwise defined below have the same meanings given to them elsewhere in this announcement:

"Admission" means admission of the Placing Shares to trading on the London Stock Exchange's AIM market;

"AIM" means the AIM market of the London Stock Exchange;

"Board" means the board of directors of the Company;

"Canaccord Genuity" means Canaccord Genuity Limited;

"Company" or "Rockhopper" means Rockhopper Exploration plc;

"Desire" means Desire Petroleum plc (AIM:DES);

"Directors" means the directors of the Company;

"General Meeting" means the General Meeting of the Company proposed to be held on or around 5 November 2010;

"Group" means the Company and its subsidiary undertakings;

"Joint Bookrunners" means Canaccord Genuity and Merrill Lynch;

"London Stock Exchange" means London Stock Exchange plc;

"Merrill Lynch" means Merrill Lynch International;

"Ordinary Shares" means the ordinary shares of one penny each in the share capital of the Company;

"Placees" means investors with whom Placing Shares are placed;

"Placing" means the placing of the Placing Shares described in this announcement;

"Placing Agreement" means the agreement dated 18 October 2010 entered into by the Company, Canaccord Genuity and Merrill Lynch in connection with the Placing;

"Placing Price" means the price at which the Placing Shares are to be issued pursuant to the Placing;

"Placing Shares" means the new Ordinary Shares to be issued pursuant to the Placing;

"Resolution" means the resolution numbered as 1 to be set out in the notice of General Meeting pursuant to which it is proposed that the Directors be authorised to allot the Placing Shares;

"United States" or "US" means the United States of America, its territories and possessions, any State of the United States and the District of Columbia; and

"£" means the lawful currency of the United Kingdom.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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