Exploration Activity Update
Rockhopper Exploration plc
18 October 2006
Rockhopper Exploration plc
PRESS RELEASE
FOR IMMEDIATE RELEASE
18th October 2006
Exploration Activity Update
Integration of data provides greatly improved clarity on prospects
•CSEM and 2D seismic data give direct hydrocarbon indicators
•Ernest Prospect (formerly J1) significantly de-risked, potentially c. 100
million barrels of recoverable reserves
•Potential discovered NPV10 over $1,000 million at $50 oil for prospect
Ernest
Rockhopper Exploration plc ('Rockhopper' or 'the Company') has today announced
that data from the two Controlled Source Electromagnetic Surveys (CSEM) carried
out on its behalf by Offshore Hydrocarbon Mapping plc earlier in 2006, when
co-rendered (superimposed) with recently acquired 2D seismic data, provides
greater clarity of the structures surveyed and significantly de-risks the
acreage.
Executive Chairman, Dr. Pierre Jungels, said:
'This is great news, we took a bold step utilising CSEM and have substantially
de-risked our prospects. We now have a drillable prospect, Ernest, which if
successful could contain over 100 million barrels of recoverable oil.
In little more than a year since listing on AIM, we have significantly increased
our understanding of and confidence in the prospectivity our North Falkland
Basin acreage. We now have a highly de-risked drillable prospect and a number of
encouraging leads in licences PL023 and PL024.
We intend making further progress in our understanding with a 3D seismic survey
starting later this month in licences PL032 and PL033 and conducting further
evaluation of the 2006 2D seismic data on licences PL023 and PL024 with the aim
of identifying a number of additional drillable targets for any drilling
programme.'
Further technical information
Ernest Prospect (formerly J1)
2D
Interpretation of the 2D seismic acquired in 2006 has confirmed the robust
nature of the prospect and also provided potential hydrocarbon indicators.
Prospect Ernest is a relatively low risk independent 4-way dip closed structure
in 160m of water only 100km from the Islands. The 4-way closure looks more
robust having interpreted the new seismic, with an areal extent of some 2880
acres. It is also possible to map a much bigger, somewhat more risky closure
around it. This area depends upon closure against a major fault to the East and
has an area of over 6,000 acres. We have observed an AVO (Amplitude Versus
Offset) response on the flank of the structure along with possible gas chimneys
and flat spots within the area of closure, all of which are potential
hydrocarbons indicators. The new seismic also contains strong indications of the
presence of reservoir units in the area.
CSEM
The CSEM data clearly shows resistors within the structure. On both the lines
acquired over Ernest, a discreet resistive body is observed within the bounds of
the 4 way closure. That resistor, in the opinion of the Company, when combined
with the new seismic data, is suggestive of the presence of a hydrocarbon
accumulation trapped within the structure.
Combining all the data and using fairly conservative assumptions leads us to
believe that Ernest, as mapped to the less risky four way closure, could contain
approximately 312 million barrels of oil, of which approximately 100 million
could be recoverable.
At the time of the admission to AIM, Scott Pickford independently risked the
prospect at a chance of success of 19.4%. From that point and following the
interpretation of the 2D and CSEM data, we now believe that the chance of
success has increased to over 40%, with the main remaining risk being reservoir
quality. This reduction in risk, combined with a higher oil price environment,
has hugely increased the EMV (Expected Monetary Value) of the prospect.
At the time of the admission to AIM, Scott Pickford built an economic model for
the prospect. Using that model, the NPV of a 107 million barrel recoverable
field at an oil price of $50 per barrel is over $1,000 million, should the oil
price fall to $30 per barrel, the NPV would fall to $323 million.
The prospect is now ready to drill. As a result, we have upgraded its status and
named it Ernest. The prospect is named both after the son of Director Richard
Visick who was born in the run up to the AIM admission, and after Explorer
Ernest Shackleton, who had a strong connection to the Falkland Islands.
Lead K
2D
The 2D seismic confirms the presence of a number of relatively shallow rollover
leads in the area of target K. More seismic is required to further define the
extent of the structures in the area.
CSEM
The CSEM resistivity data show a resistive body which appears to be coincident
with a structural closure. However, it is not the original structure targeted in
the survey, but a flanking structure to the north east. This is an interesting
and encouraging result and further investigation is required in the area.
2D seismic - other areas
2D seismic was also acquired over a broad area in the south of licences PL023
and PL024. Interpretation of these data is continuing and is allowing Rockhopper
to focus its future exploration efforts in the most prospective parts of these
licences.
New 3D seismic acquisition programme
Our 3D seismic programme with CGG Marine in licences PL032 and PL033 will now
begin at the end of October, some 2 months earlier than anticipated. This will
accelerate our work programme and could lead us to have a number of additional
drillable targets by the middle of 2007. At that point, we will be ready to join
any drilling programme in the Falkland Islands subject to funding.
Images of the co-rendered 2D and CSEM data over Ernest and K will be placed on
the Rockhopper website: www.rockhopperexploration.co.uk.
NB: This statement has been approved by the Company's geological staff who
include Keith Williams (Exploration Director), who is a Member of The European
Association of Geoscientists & Engineers (EAGE) with over 30 years of experience
in petroleum exploration and management, for the purpose of the Guidance Note
for Mining, Oil and Gas Companies issued by the London Stock Exchange in respect
of AIM companies, which outline standards of disclosure for mineral projects.
For further information, please contact:
Rockhopper Exploration plc www.rockhopperexploration.co.uk
Sam Moody - Managing Director 01722 414 419
Aquila Financial Ltd www.aquila-financial.com
Peter Reilly 020 7202 2601
Ross Bethell 020 7202 2603
Notes to editors
www.rockhopperexploration.co.uk
The Rockhopper Group started trading in February 2004 to invest in and carry out
an offshore oil exploration programme to the north of the Falkland Islands. The
Group, floated on AIM (RKH) in August 2005, is currently the largest licence
holder in the North Falkland Basin and has a 100 per cent. interest in four
offshore production licences which cover approximately 5,800 sq. km. These
licences have been granted by the Falkland Islands government.
Background
Rockhopper contracted Offshore Hydrocarbon Mapping plc in January 2006 to
conduct two CSEM surveys over its acreage in the North Falkland Basin during
January and February 2006. The surveys covered targets Ernest (formerly known as
J1) and lead K. Those areas were also the subject of a new 2D seismic survey,
acquired during January and February 2006.
Both targets (Ernest and K) are located in relatively shallow water of less than
200m in licences PL023 and PL024, an undrilled part of the North Falkland Basin
near the Islands representing an independent play type from those plays and
targets in the more northern part of the basin. The targets are both relatively
shallow and this, combined with the shallow water depth, would make any wells
drilled relatively quick and inexpensive should a rig be drilling in the area.
This information is provided by RNS
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