Final Results
Summary by AI BETAClose X
3 June 2026
Rockhopper Exploration plc
("Rockhopper" or the "Company")
Full Year Results for the Year Ended 31 December 2025
Rockhopper Exploration plc (AIM: RKH), the oil and gas company with key interests in the North Falkland Basin, is pleased to announce its audited results for the year ended 31 December 2025.
2025 AND POST PERIOD HIGHLIGHTS
· Sea Lion Phase 1 sanctioned
· Rockhopper funded for Phase 1
· First oil targeted Q1 2028
· 110 mmbbls 2P reserves net to Rockhopper
· 211 mmbbls 2C resources net to Rockhopper
Sea Lion Development
Project
· Development of Phase 1 of the Sea Lion field - offshore to the north of the Falkland Islands - sanctioned
· Debt Financing in place consisting of US$1.0 billion of senior debt, of which US$350 million is Rockhopper debt
· Equity raises completed to fund the development of Phase 1 of Sea Lion
o Placings raising US$142 million
o Significantly oversubscribed open offer raising a further US$9.2 million
· Key project commercial contracts in place including, but not limited to:
o FPSO charter
o Drilling rig
o Drilling and completion services
· Notice was served on the FPSO in the UK to disconnect, with the vessel having left its previous production location, ahead of a period of refurbishment work prior to deployment at Sea Lion
· Phase 1 FPSO work moved from the Middle East to Asia
· Target for First Oil remains Q1 2028 following a Final Investment Decision on Phase 1 in December 2025
· JV investigating the possibility of accelerating development of subsequent phases
· MOU signed for second larger FPSO with production capacity of approximately 125,000 barrels per day
Reserves and Resources
· Updated independent technical report (RKH working interest):
o 110 mmbbls 2P reserves comprising 57.9 mmbbls associated with Phase 1 (Reserves under development) and 51.9 mmbbls associated with Phase 2 (Reserves planned for development)
o 211 mmbbls 2C resources
o Significant upside potential
Corporate and Financial
· Cash and term deposits balance at 31 December 2025 of US$179 million* (31 December 2024: US$20.9 million)
Ombrina Mare Arbitration
· Ombrina Mare Arbitration Award (the "Award") annulled
· Receipt of €31 million under terms of the insurance policy in respect of the Award
· A new request for arbitration was made in September 2025, with the new funder responsible for all associated costs
* Includes US$8 million classified as held for sales
Sam Moody, Chief Executive Officer of Rockhopper, commented:
"This has been a transformative period for Rockhopper as the Sea Lion project moves into full development phase following its financing and sanction late in 2025. We look forward to continuing our very constructive working relationship with operator Navitas in the coming months as we further progress the project. We remain hugely grateful for shareholders' continuing support and look forward to updating them on Sea Lion in due course."
Enquiries:
Rockhopper Exploration plc
Sam Moody - Chief Executive Officer
Tel. +44 (0)20 7390 0230 (via Vigo Consulting)
Canaccord Genuity Limited (NOMAD and Joint Broker)
Henry Fitzgerald-O'Connor / James Asensio / Charlie Hammond
Tel. +44 (0)20 7523 8000
Peel Hunt LLP (Joint Broker)
Richard Crichton / Georgia Langoulant
Tel. +44 (0)20 7418 8900
Vigo Consulting
Patrick d'Ancona / Ben Simons / Fiona Hetherington
Tel. +44 (0)20 7390 0234
Lucy Williams (BSc Geology, MSc Petroleum Geology, Chartered Geologist), the Company's Geoscience Manager, has reviewed and approved the technical information contained within this announcement.
Notes to Editors
Rockhopper Exploration plc is a UK-based oil and gas exploration and production company with key interests in the Falkland Islands. The Company holds a 35 per cent interest in licences in the North Falkland Basin, where it has sanctioned the development of the significant Sea Lion field, originally discovered by the Company in 2010.
Rockhopper's shares are quoted on the AIM market of the London Stock Exchange under the ticker RKH.
For more information, visit the Company's website at www.rockhopperexploration.co.uk.
Note regarding financial information disclosure
The financial information set out below does not constitute the Group's statutory accounts for the year ended 31 December 2025 but is derived from those accounts. References within the document may refer to information in the statutory accounts and these will be sent to shareholders and published on the Company's website imminently.
Chair and CEO Review
Sea Lion
Financing and FID
The period under review saw Rockhopper sanction Phase 1 of the Sea Lion Project (the "Project"), the single most important milestone we have achieved since completing our appraisal campaign in January 2012. Partner and Operator, Navitas Petroleum Development and Production Limited ("Navitas") has also taken final investment decision ("FID") relating to the Project.
Following the announcement of conditional equity placings to fund Rockhopper's project equity requirement in July 2025, a full project financing was put in place and, having received all necessary approvals and consents, FID for Phase 1 of the Sea Lion Project was announced on 10 December 2025, with Financial Close shortly after on 22 December 2025. The financing was completed on 31 December 2025 with the conditional placings raising approximately US$142 million before expenses through the issue of 201,102,976 new ordinary shares at an issue price of 53p (the "Placing"). In addition, 50,275,732 underwriting warrants were issued giving the holder the right to subscribe for one new ordinary share at a strike price of 80p per share.
An open offer was concluded in January 2026 in order to give existing shareholders the opportunity to participate in the equity raise at the same 53 pence per share level as the Placing (the "Open Offer"). This Open Offer, which was 7.8x over subscribed, raised an additional US$9.2 million before expenses through the issue of 13,188,036 Open Offer shares.
The project financing consists of US$1.0 billion of senior debt (of which US$350 million is Rockhopper debt) with the balance being provided via a combination of joint venture equity and post first oil cash flows. Rockhopper benefits from previously disclosed financing loans from Navitas in relation to the Project (with the loan balance at YE2025 at US$52.5 million) and, as a result, the net Rockhopper equity requirement was confirmed at US$102 million, in addition to the previously disclosed Rockhopper share of a 5% equity overrun support which is approximately US$10 million (therefore in aggregate US$112 million).
Additional costs of US$5.25 million net to Rockhopper arose as a result of a change in location for the work required to be undertaken on the FPSO, as detailed in the FPSO section below. Taking into account this additional equity requirement, Rockhopper remains funded for Phase 1 of the development.
The Rockhopper senior debt facility will be for US$350 million with a tenor of 7 years. First drawdown shall not be permitted until the agreed equity amount has been distributed into the Sea Lion Project. Semi-annual straight-line amortisations commence on 31 March 2029. The margin is SOFR + 525bps during the pre-completion period, moving to 425bps in years 1 and 2 post project completion, 450bps during year 3 post completion and 475bps thereafter. Mandatory hedging of 50% PDP[1] is required during year 1 post project completion, 33.3% in year 2 and 25% in year 3. A commitment fee of 30% of margin on available undrawn is payable semi-annually. The senior debt facility contains other representations, covenants and default provisions that are customary for a facility of this nature.
An additional financial requirement has been placed on the joint venture ("JV") developing Sea Lion - comprising Navitas and Rockhopper - to cover the eventuality that the project fails without producing sufficient cash flow for the JV and its funders to continue work. This Early Project Failure requirement is currently estimated at US$52.5 million net to Rockhopper. We are currently investigating the possibility of covering this via a combination of surety bond, parent company guarantees, cash or any other suitable instrument. Whilst the total net cost to Rockhopper remains uncertain, the Board believes it is unlikely to exceed US$52.5 million.
Navitas has confirmed it is advancing alternatives to accelerate the development plan for the further resources in the oil asset that are not included in the development plan, whereby production under subsequent development phases may be executed in combination with other production facilities.
As part of the acceleration alternatives, Navitas has entered into a non-binding memorandum of understanding ("MOU") during May 2026 for the acquisition of an additional FPSO with a production capacity of approximately 125,000 barrels per day, which may serve the future development phases of the Project. The completion of the transaction is subject to, inter alia, the completion of due diligence, negotiations, and the signing of binding agreements, as well as the fulfillment of customary conditions precedent. It should be noted that there is no certainty that the transaction will be completed.
Resources and Reserves
Following the sanction of Phase 1 of the Sea Lion Project, Rockhopper commissioned and published an updated independent reserves and resources evaluation conducted by Netherland Sewell and Associates ("NSAI") (the "Report").
Importantly, the Report has reclassified volumes contained in the Sea Lion Field Northern Development Area ("NDA") Phases 1 and 2 from the Contingent Resources classification to the Reserves classification. This reclassification has been possible following the Company's FID on the Sea Lion field, made in December 2025. Phase 2 of the Sea Lion development is expected to be financed from cashflow generated by Phase 1. Later phases of the Sea Lion development have remained within the Contingent Resources category.
Reserves
Summary of Gross and Working Interest Net Recoverable Reserves and Future Net Revenue attributable to Sea Lion Field NDA Phases 1 and 2
Rockhopper holds a 35 per cent working interest in the Sea Lion field.
|
|
Oil (MBBL) Gross (100%) |
Oil (MBBL) Working Interest (35%) |
Future Net Revenue Working Interest (35%) (US$000) Undiscounted |
Future Net Revenue Working Interest (35%) (US$000) NPV10 |
|
Proved Undeveloped (1P) |
230,672.5 |
80,735.4 |
2,134,911.1 |
720,915.6 |
|
Probable |
83,165.3 |
29,107.8 |
968,135.7 |
244,866.9 |
|
Proved + Probable (2P) |
313,837.7 |
109,843.2 |
3,103,046.8 |
965,782.5 |
|
Possible |
94,326.3 |
33,014.2 |
1,399,698.4 |
303,227.4 |
|
Proved + Probable + Possible (3P) |
408,164.0 |
142,857.4 |
4,502,745.3 |
1,269,009.9 |
Note: Oil volumes are expressed in thousands of barrels (MBBL). Gross (100%) figures represent total field reserves; working interest figures represent Rockhopper's 35 per cent share. Future net revenue is after deductions for Rockhopper's share of state royalties, capital costs, abandonment costs, operating expenses and estimates of Falkland Islands corporate income taxes. NPV10 represents future net revenue discounted at an annual rate of 10 per cent. NPV10 should not be construed as the fair market value of the properties. All figures are based on the Base Price Case. See Economic Parameters below.
Contingent Resources
The contingent resources figures below are unrisked - they have not been adjusted for the probability of commercial development. These estimates should not be aggregated with reserves without extensive consideration of the differing degrees of technical and commercial risk.
Unrisked Gross (100%) Contingent Resources - Oil (MBBL)
|
|
Low Estimate (1C) MBBL |
Best Estimate (2C) MBBL |
High Estimate (3C) MBBL |
|
Development Pending |
238,736.9 |
412,481.3 |
531,242.9 |
|
Development On Hold |
78,971.1 |
181,078.2 |
299,712.5 |
|
Development Not Viable |
5,713.6 |
9,602.7 |
14,529.9 |
|
Total |
323,421.6 |
603,162.1 |
845,485.3 |
Unrisked Working Interest (35%) Contingent Resources - Oil (MBBL)
|
|
Low Estimate (1C) MBBL |
Best Estimate (2C) MBBL |
High Estimate (3C) MBBL |
|
Development Pending |
83,557.9 |
144,368.4 |
185,935.0 |
|
Development On Hold |
27,639.9 |
63,377.4 |
104,899.4 |
|
Development Not Viable |
1,999.8 |
3,360.9 |
5,085.5 |
|
Total |
113,197.6 |
211,106.7 |
295,919.9 |
Summary of Unrisked Working Interest (35%) Contingent Cash Flows after Falkland Islands Taxes
Economic analysis has been performed on the Development Pending contingent resources only.
|
|
Total (US$000) Undiscounted |
NPV10 (US$000) |
|
Low Estimate (1C) |
1,813,859.5 |
554,524.8 |
|
Best Estimate (2C) |
4,286,664.2 |
1,202,666.3 |
|
High Estimate (3C) |
6,244,948.0 |
1,610,092.7 |
Economic Parameters
The Report has been prepared using the following Base Price Case oil price parameters, based on Brent Crude prices adjusted for quality, transportation fees and market differentials:
|
Period Ending |
Oil Price (US$/Barrel) |
|
31 December 2026 |
62.99 |
|
31 December 2027 |
64.79 |
|
Thereafter |
73.63 |
The development scenario underlying the NPV calculation for the contingent resources aligns with the previously disclosed multi-phase, two-FPSO scheme comprising the Northern Development Area ("NDA") Phases 1, 2 and 3 and the Central Development Area ("CDA") Phases 1 and 2.
FPSO
Notice was given to disconnect the FPSO from its former location at the Lancaster field in the UK and it has begun its move to a shipyard so that a full inspection can be carried out ahead of moving the vessel to a suitable dry dock to undertake the required work ahead of commencing production. Work has commenced on the Falkland Islands, including upgrading the temporary dock facility and constructing suitable lay down, warehousing and offices. Construction of the flexibles and umbilicals has commenced and work on the FPSO turret and moorings is due to commence shortly.
Due to the commencement of the war with Iran in March 2026 and its ramifications, the Navitas decided to change the location of the FPSO upgrade and adaptation works and execute them at a shipyard in Asia, instead of the original Middle East plan. Following this change, an amount of approximately USD 45 million (100%) was added to the Project's budget. Rockhopper benefits from a loan from Navitas covering 2/3 of its 35% equity requirement for Phase 1 of the Sea Lion development. Accordingly, the net increase in Rockhopper's equity costs was US$5.25 million and Rockhopper remains funded for Phase 1 of the project.
Falklands taxation agreement
As part of the FID process, Rockhopper and the Falkland Island Government ("FIG") entered into a final settlement agreement relating to a previously disclosed disputed taxation amount on the farm out to Premier Oil in 2012, as the existing arrangement was incompatible with achieving FID at Sea Lion. The final settlement agreement also settled any tax liability in relation to the farm out to Navitas in 2022. The new arrangement provides that Rockhopper shall pay to FIG (the tax liability) in instalments, amounting to a total of £30 million on an undiscounted basis. The payment schedule is as follows
· £1m at signing of the final settlement agreement (paid)
· £2m at Phase 1 sanction (paid)
· £1m 30 calendar days from First Oil (the "Payment Date")
· £2m on the first anniversary of the Payment Date
· £3m on the second anniversary of the Payment Date
· £7m on the third anniversary of the Payment Date
· £7m on the fourth anniversary of the Payment Date
· £7m on the fifth anniversary of the Payment Date
The final settlement provides that early payments can be made, attracting a discount of 10% per annum. If payments are made late, the agreement provides for interest to be paid at a rate of 10% per annum. FIG's existing security, including charges over certain Group subsidiary assets, was replaced by security over a dedicated Rockhopper bank account into which all of the net post financing, post Navitas loan repayment cash flows will be distributed.
Ombrina Mare annulment
On 3 June 2025, it was announced that the Republic of Italy succeeded in having the International Centre of Settlement of Investment Disputes ("ICSID") Ombrina Mare Arbitration Award (the "Award") annulled by the ad hoc Panel.
Italy submitted an application in October 2022 to the ICSID seeking to annul the Award under Article 52 of the ICSID Convention. On 14 October 2024, Rockhopper announced it had decided, in line with normal market practice, that insuring to protect shareholders against loss resulting from an annulment of the Award was the most prudent course of action.
Following the annulment of the Award, Rockhopper made a claim under terms of the insurance policy and, on 29 August 2025, confirmed it had received the full €31 million entitlement under the insurance arrangements (the "Insurance Proceeds").
The resubmission of a new request for arbitration was made in September 2025, and the new funder continues to be responsible for all costs associated with this. To the extent that Rockhopper makes a financial recovery from any new arbitration, after deductions for any reasonable costs and expenses incurred, that recovery will be utilised to reimburse the insurers in respect of the Insurance Proceeds. Further announcements will be made in due course as and when appropriate.
Italian Disposal
As announced on 14 October 2024, Rockhopper signed an SPA to dispose its Italian interests, other than the Ombrina Mare arbitration, to Zodiac Energy Limited ("Zodiac"), a locally run, Italian E&P company.
The SPA is for the sale of Rockhopper Civita Limited (a wholly owned subsidiary of Rockhopper Exploration Plc). Rockhopper Civita Limited holds all Rockhopper's Italian assets and liabilities with the exception of the Ombrina Mare Arbitration Award.
Under the terms of the SPA, Zodiac will pay €1 consideration to Rockhopper on Completion, with Rockhopper retaining upside participation in two undeveloped licences. Completion is conditional on Italian regulatory approval. At Completion, Rockhopper Civita Limited (the entity being sold) must hold a minimum cash balance of €5.5 million
In order to satisfy a number of additional information requests from the Italian regulator, the long-stop date for the transaction has been extended to 30 June 2026.
Board composition
We thank Alison Baker for her input since 2018 and welcomed Richard Slape to the Board just after the year end to succeed Alison as Audit Chair. With Rockhopper entering a new phase in its development having taken FID at Sea Lion, and to reflect the increasingly international nature of the shareholder register, two additional directors will be proposed at the upcoming AGM, further details will be provided in a separate RNS shortly.
Summary
Having discovered Sea Lion in May 2010 and gone on to appraise the field during 2010 and 2011, all 100% as operator, sanctioning the first phase of the Project represents the most material step since that time towards unlocking the huge value inherent in the Project for all stakeholders.
The Placing and Open Offer, combined with the senior debt and Navitas loans, ensured Rockhopper was fully funded and able to take FID.
The Navitas loan, which covers 2/3 of the net Rockhopper equity requirement, provides good insulation against any inflation in project costs and the 50 million outstanding warrants at 80 pence per share give potential access to additional funding should any be required.
Extracting numbers from NSAI Report shows a value of in excess of US$2 billion when aggregating Rockhopper's net 2P + 2C reserves and resource base of 321 mmbbls at a realised oil price of US$71.13/bbl. This increases to US$2.8 billion at a realised oil price of US$82.17/bbl. The Report also highlights the very significant running room and upside within the Rockhopper acreage.
Having sanctioned Phase 1 of Sea Lion, we look forward to continuing our work with Operator Navitas - not only toward first oil in 2028, but also to explore opportunities to accelerate the development of remaining discovered resources and exploration upside in the basin.
FINANCIAL REVIEW
OVERVIEW
The most significant event in 2025 was the sanctioning of the Sea Lion Development. In December 2025, the Group achieved Final Investment Decision ("FID") on Phase 1 of the Sea Lion oil field, located in the North Falkland Basin. This milestone was underpinned by a successful equity fundraise raising net proceeds of US$135 million, financial close on a US$350 million Senior Debt Facility, and approval of the Field Development Plan by the Falkland Islands Government. As a result of FID, the Group's Exploration and Evaluation assets of US$329.2 million were reclassified to tangible development and production assets.
The year also saw the conclusion of the Ombrina Mare arbitration annulment proceedings. In June 2025 the ad hoc Committee ruled in favour of Italy, annulling the Award in full. Whilst this was a disappointing outcome, the Group had in place an insurance policy that entitled Rockhopper to receive €31 million, which was received in August 2025. Separately, a new request for arbitration was submitted in September 2025, the costs of which are borne by the Group's funding partner under the Monetisation Agreement.
RESULTS FOR THE YEAR
For the year ended 31 December 2025 the Group, including discontinued operations, reported a loss of US$39.7 million (2024: profit of US$47.6 million). The swing from profit to loss is principally driven by the reduction in fair value of the Monetisation Agreement and the associated accounting for insurance proceeds following the annulment of the Award, together with a significant increase in administrative expenses in a year of exceptional corporate activity.
DISCONTINUED OPERATIONS
The Group's Greater Mediterranean operations, held within Rockhopper Civita Limited, continue to be classified as held for sale and presented as discontinued operations in accordance with IFRS 5. The disposal remains subject to regulatory approval from the Italian regulator, and the long-stop date under the Sale and Purchase Agreement has been extended to 30 June 2026. Under the terms of the transaction Rockhopper Civita Limited is required to hold €5.5 million in cash and cash equivalents on transfer; accordingly US$8.2 million of cash and term deposits held by the entity is presented within assets classified as held for sale at the year end. The loss from discontinued operations for the year was US$1.5 million (2024: profit of US$1.3 million).
OPERATING COSTS
Exploration and Evaluation Expenses
Exploration and evaluation expenses of US$0.3 million (2024: US$0.4 million) represent write-offs of costs relating to areas of the North Falkland Basin and South Falkland Basin that will not form part of the Sea Lion Phase 1 project.
Administrative Expenses
Administrative expenses increased significantly to US$9.8 million (2024: US$3.3 million). The increase reflects the exceptional level of corporate activity in the year, including costs associated with the FID process, the equity fundraise and the entry into the Senior Debt Facility. Total staff costs were US$6.9 million (2024: US$3.4 million), which includes the impact of bonuses relating to the sanctioning of the Sea Lion development as well as US$1.8 million for accrued Employers National Insurance, caused by a substantial increase in share price in the period which has led to an increase in the NI provision for in-the-money employee share options. Other professional fees were US$2.1 million (2024: US$0.4 million), reflecting strategic advisory costs associated with the FID process, the Senior Debt Facility and the equity placing as well as ensuring the Group is prepared for the post first oil world.
Foreign Exchange
A net foreign exchange gain of US$3.0 million (2024: US$0.2 million) arose in the year, predominantly reflecting the strengthening of Sterling and Euro against the US Dollar and the Group's sterling and euro-denominated monetary positions.
OTHER INCOME AND EXPENSES
Other income for the year of US$35.2 million (2024: US$79.8 million) represents the €31 million insurance proceeds receivable following the annulment of the Award by the ad hoc Committee in June 2025, received in August 2025. Other expenses of US$69.7 million (2024: US$1.0 million) comprise: a reduction in the fair value of the Monetisation Agreement of US$42.9 million; recognition of an IFRS 9 liability for the potential repayment of insurance proceeds of US$21.6 million; the write-off of the remaining insurance premium prepayment of US$3.9 million; and other costs of US$1.3 million. The net charge through other income and expenses in the year is US$34.5 million (2024: net income of US$78.8 million).
In June 2025 the ad hoc Committee issued its decision, finding in favour of Italy and annulling the Award in its entirety. As a result, the Tranche 2 payment of €65 million will not be received under the Monetisation Agreement. A new request for arbitration against Italy was submitted in September 2025, the costs of which are borne by the Specialist Fund under the Monetisation Agreement.
The Monetisation Agreement continues to be recognised as a financial instrument at fair value through profit or loss in accordance with IFRS 9. The fair value reduced from US$58.2 million to US$22.1 million in the year, through a combination of changes in fair value and foreign exchange, resulting in a loss of US$42.9 million recognised in other expenses. The fair value of US$22.1 million is presented within non-current financial assets at 31 December 2025, reflecting the expected long-term timing of any future recovery from the resubmitted arbitration.
Under the terms of the Insurance, to the extent Rockhopper makes any future financial recovery from the resubmitted arbitration or otherwise, after deducting reasonable costs and expenses, that recovery will be utilised to reimburse the insurers. Management has determined that this repayment obligation is a financial liability within the scope of IFRS 9 and has recognised a non-current liability of US$21.6 million representing its fair value, estimated on the same probability-weighted basis as the Tranche 3 proceeds and capped at an undiscounted value of €31 million.
FINANCE INCOME AND EXPENSE
Finance income for the year was US$2.1 million (2024: US$1.9 million), comprising the unwinding of the discount on the fair value of the Monetisation Agreement prior to annulment of US$1.2 million (2024: US$1.3 million) and bank and deposit interest of US$0.9 million (2024: US$0.6 million).
Finance expense increased to US$2.4 million (2024: US$0.3 million), principally reflecting interest of US$2.2 million accruing on the co-venturer loan provided by Navitas in connection with the Sea Lion pre-FID expenditure programme (2024: US$0.2 million). The cumulative balance of this loan, including accrued interest, at the year end was US$52.5 million (2024: US$15.4 million).
CASH MOVEMENTS AND CAPITAL EXPENDITURE
As at 31 December 2025, the Group had cash and cash equivalents of US$157.6 million (31 December 2024: US$0.9 million) and term deposits of US$13.4 million (31 December 2024: US$20.0 million). In addition, US$8.2 million of cash held within Rockhopper Civita Limited is presented within assets classified as held for sale, being ring-fenced in accordance with the terms of the disposal agreement. Together with the undrawn committed Senior Debt Facility of US$350 million, total available liquidity at the year end was US$521.0 million.
Cash flows from operating activities generated US$29.5 million (net of working capital movements and before tax). Tax paid in the year was US$5.3 million, principally comprising the first two instalment payments under the FIG Settlement Deed totalling GBP3 million. The principal cash movements during the period are set out below:
|
|
US$m |
|
Opening cash (31 December 2024) |
0.9 |
|
Cash generated from operating activities |
29.5 |
|
Tax paid |
(5.3) |
|
Term deposits (net release) |
8.2 |
|
Purchase of PPE and intangibles |
(0.0) |
|
Exercise of share options |
0.2 |
|
Issuance of shares and warrants (net of costs) |
135.0 |
|
Loan funding (co-venturer loan) |
9.1 |
|
Prepaid financing costs |
(12.8) |
|
Exchange gain on cash |
1.0 |
|
Closing cash per cash flow statement (31 December 2025) |
165.8 |
|
Less: cash within assets held for sale (Rockhopper Civita) |
(8.2) |
|
Cash and cash equivalents per balance sheet |
157.6 |
Additions to exploration and evaluation assets during the year of US$58.4 million (2024: US$14.7 million) relate to the Sea Lion development and were funded primarily through the pre-FID co-venturer loan facility provided by Navitas.
Following FID and financial close, all exploration and evaluation assets of US$329.2 million were reclassified to development and production assets within property, plant and equipment at 31 December 2025. An impairment assessment was performed immediately prior to reclassification in accordance with IAS 36, using a Value in Use discounted cash flow approach with a pre-tax discount rate of 8.08%, and no impairment was identified. Post-FID capital commitments of US$579 million have been approved in connection with the Sea Lion Phase 1 development programme.
OTHER RECEIVABLES
Other receivables at 31 December 2025 were US$18.7 million (2024: US$62.3 million). The significant decrease reflects the cash receipt of the €31 million insurance proceeds in August 2025 and the reclassification of the Monetisation Agreement fair value to non-current financial assets, partially offset by an increase in prepayments. Prepayments of US$18.0 million at 31 December 2025 principally comprise prepaid costs and loan arrangement fees relating to the Senior Debt Facility, which will be capitalised and amortised over the term of the facility.
The fair value of the Monetisation Agreement of US$22.1 million is presented as a non-current financial asset at 31 December 2025 (2024: US$58.2 million within current other receivables), reflecting the expected long-term timing of any future recovery from the resubmitted arbitration.
TAXATION
On 9 December 2025 the Company and the Falkland Islands Government ("FIG") entered into a final Settlement Deed in respect of the historic tax uncertainty arising from the 2012 and 2022 farm-outs. The Settlement Deed provides for total payments of GBP30 million in eight instalments linked to the Sea Lion development timeline. The first two instalments totalling GBP3 million were paid in December 2025. The Settlement Deed also operates to settle any tax liability arising in connection with the 2022 farm-out to Navitas Petroleum.
The liability has been discounted at 10% per annum, being the rate inherent in the Settlement Deed for early payment, giving a present value of GBP15.5 million (US$20.9 million) at 31 December 2025. No further instalments fall due within twelve months of the balance sheet date, with all remaining payments linked to the timing of First Oil, which is not expected until 2028; accordingly the full carrying value is presented within non-current liabilities.
The net tax credit of US$3.8 million (2024: charge of US$30.4 million) reflects: a current tax charge of US$1.0 million, comprising a prior year adjustment of US$1.9 million mainly arising from the remeasurement of the FIG Settlement Deed liability; and a deferred tax credit of US$6.7 million reflecting the reduction in deferred tax liabilities in the year.
EQUITY AND FINANCING
In December 2025 the Company completed an equity fundraise by way of a Placing and Subscription at an issue price of 53 pence per Unit, raising gross proceeds of US$142 million. Each Unit comprised one new Ordinary Share and, for every four new Ordinary Shares subscribed for, one Warrant exercisable at 80 pence per Ordinary Share. The Placing utilised a cashbox structure in accordance with section 612 of the Companies Act 2006, with the premium on the ordinary shares recognised within the merger reserve. Net proceeds received in the year, after costs of US$7.0 million, were US$135.0 million.
As a result of the fundraise and the exercise of share options during the year, total equity increased to US$347.2 million at 31 December 2025 (2024: US$248.4 million). The weighted average number of shares in issue during the year was 645.7 million (2024: 643.6 million). A basic loss per share of 6.15 cents is reported (2024: earnings per share of 7.40 cents).
Subsequent to the year end, the Company completed an Open Offer to Qualifying Shareholders at the same issue price of 53 pence per share, raising gross proceeds of approximately GBP6.9 million (approximately US$9.2 million) through the issue of 13,188,036 new ordinary shares. Admission took place on 21 January 2026, at which date the Company's total issued share capital comprised 860,504,777 ordinary shares.
LIQUIDITY, COUNTERPARTY RISK AND GOING CONCERN
The Directors have assessed the Group's ability to continue as a going concern for a period of at least twelve months from the date of approval of the financial statements, being to 30 June 2027 (the "Assessment Period").
At 31 December 2025, the Group had cash and cash equivalents of US$157.6 million, term deposits of US$13.4 million and an undrawn committed Senior Debt Facility of US$350 million, providing total available liquidity of US$521.0 million. The Group is pre-revenue and has not yet achieved first oil.
The base case cash flow forecast, which incorporates the Sea Lion Phase 1 development programme consistent with the approved banking model together with corporate and administrative expenditures and tax obligations, indicates that the Group's existing cash resources are sufficient to meet all committed expenditure within the Assessment Period. The Directors are satisfied that, having regard to the contingencies in the approved cost estimate, the Equity Overrun Support mechanism, and the cost-sharing structure under the Co-Venturer Loan arrangements under which the Group is required to fund only one-third of its share of project capital costs prior to completion, the Group's funding position is resilient to reasonably foreseeable cost movements within the Assessment Period. Sensitivity analysis, including a reasonable downside scenario modelling gross capital expenditure increases above the base case, confirms that the Group maintains sufficient liquidity under all scenarios considered.
First drawdown under the Senior Debt Facility is forecast to occur toward the end of the Assessment Period. Management has reviewed the conditions precedent to first drawdown and considers all are reasonably capable of being satisfied in accordance with the project timeline.
The Directors do not consider that any material uncertainty exists that would cast significant doubt on the Group's ability to continue as a going concern within the Assessment Period. Accordingly, they consider it appropriate to adopt the going concern basis of accounting in preparing these financial statements.
PRINCIPAL RISKS AND UNCERTAINTIES
Rockhopper's only material asset is its 35% non-operating interest in the Sea Lion Phase 1 development. All principal risks therefore relate to this single asset. A full description of each risk and the mitigating actions taken by the Board is set out in the Principal Risks and Uncertainties section of the Strategic Report.
- Funding and capital structure: The Group is fully funded to First Oil under its base case, supported by the US$350 million Senior Debt Facility, the Navitas Post-FID Loan and Underwriting Warrants; material cost overruns beyond the funded contingencies could require additional capital.
- Cost overrun: Phase 1 gross capital costs are estimated at approximately US$1.7 billion; whilst lump sum contracts have been awarded for major scopes and contingency is included, global supply chain pressures could drive costs above the current estimate.
- Oil price: Sea Lion has a certified breakeven below US$24 per barrel, providing significant headroom; a sustained material decline in oil prices would nonetheless reduce project returns and could affect future financing.
- Project execution: All Phase 1 workstreams are on track against the H1 2028 First Oil target; execution risks inherent in a large remote offshore development remain, including subsea installation, drilling and on-island infrastructure.
- Geopolitical - sovereignty: The sovereignty of the Falkland Islands is disputed by Argentina; whilst no operational disruption has been experienced, the dispute represents a background risk to the project environment.
- Non-operator governance: As a 35% non-operating partner, Rockhopper does not control day-to-day development decisions; it participates actively in JV governance and Navitas is a funded, committed operator.
- Energy transition: Lender appetite for oil and gas financing has narrowed; project financing has been secured and Financial Close achieved, and the Group's focus is on maintaining full compliance with the ESG commitments attached to the debt facility.
- Physical climate: The South Atlantic operating environment carries inherent weather risk; vessels, equipment and operations are specified for the metocean conditions and the project budget includes appropriate weather contingency.
- Italian disposal: Completion of the sale of Rockhopper Civita Limited remains subject to Italian regulatory approval, with the long-stop date extended to 30 June 2026.
- HSE and security: No HSE incidents have been recorded to date; the project complies with all applicable HSSE obligations in accordance with regulatory and project financing requirements, and execution strategies are adapted to manage geopolitical security risks.
- People and organisation: As a small company with a single material asset, Rockhopper is reliant on a focused team; the Remuneration Committee regularly reviews compensation to retain key individuals through the development phase.
|
CONSOLIDATED INCOME STATEMENT |
|
|
||
|
for the year ended 31 December 2025 |
|
|
||
|
|
Notes |
2025 $'000 |
2024 $'000 |
|
|
Exploration and evaluation expenses |
4 |
(254) |
(393) |
|
|
Administrative expenses |
5 |
(9,770) |
(3,330) |
|
|
Charge for share based payments |
8 |
(146) |
(76) |
|
|
Foreign exchange movement |
9 |
2,981 |
170 |
|
|
Results from operating activities |
|
(7,189) |
(3,629) |
|
|
Other income |
10 |
35,179 |
79,802 |
|
|
Other expenses |
10 |
(69,726) |
(1,024) |
|
|
Finance income |
11 |
2,086 |
1,927 |
|
|
Finance expense |
11 |
(2,354) |
(296) |
|
|
(Loss)/ profit before tax |
|
(42,004) |
76,780 |
|
|
Tax credit/(expense) |
12 |
3,825 |
(30,421) |
|
|
(Loss)/profit from continuing operations |
|
(38,179) |
46,359 |
|
|
(Loss)/ profit for the year from discontinued operations |
13 |
(1,502) |
1,253 |
|
|
(Loss)/ profit attributable to equity shareholders of the parent company |
|
(39,681) |
47,612 |
|
|
(Loss)/profit per share attributable to the equity shareholders of the parent company: cents |
|
|
|
|
|
Basic |
14 |
(6.15) |
7.40 |
|
|
Diluted |
14 |
(6.15) |
7.28 |
|
|
Basic (continuing operations) |
14 |
(5.91) |
7.20 |
|
|
Diluted (continuing operations) |
14 |
(5.91) |
7.09 |
|
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
||
|
for the year ended 31 December 2025 |
|
|
|
|
|
|
|
2025 |
2024 |
|
|
$'000 |
$'000 |
|
|
(Loss)/ profit for the year |
(39,681) |
47,612 |
|
Items that may be reclassified to profit or loss Exchange differences on translation of foreign operations |
3,154 |
(2,094) |
|
Total comprehensive (loss)/ profit for the year |
(36,527) |
45,518 |
|
The notes on pages 57 to 81 form an integral part of these consolidated financial statements. |
|
|
|
CONSOLIDATED BALANCE SHEET |
|
||
|
as at 31 December 2025 |
|||
|
|
Notes |
2025 $'000 |
2024 $'000 |
|
Non current assets |
|
|
|
|
Exploration and evaluation assets |
15 |
- |
271,110 |
|
Property, plant and equipment |
16 |
329,240 |
10 |
|
Financial asset |
10 |
22,148 |
|
|
Total non current assets |
|
351,388 |
271,120 |
|
|
|
|
|
|
Current assets |
|
|
|
|
Other receivables |
17 |
18,709 |
62,330 |
|
Term deposits |
18 |
13,429 |
19,969 |
|
Cash and cash equivalents |
|
157,619 |
915 |
|
Total current assets |
|
189,757 |
83,214 |
|
|
|
|
|
|
Assets classified as held for sale |
13 |
9,605 |
1,203 |
|
Total assets |
|
550,750 |
355,537 |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Other payables |
19 |
48,796 |
6,516 |
|
Tax payable |
20 |
1,012 |
1,806 |
|
Total current liabilities |
|
49,808 |
8,322 |
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
Other payables |
10, 19 |
21,645 |
- |
|
Co-venturers loan |
19 |
52,493 |
15,354 |
|
Tax payable |
20 |
20,873 |
22,300 |
|
Provisions |
21 |
2,140 |
1,600 |
|
Deferred tax liability |
22 |
39,137 |
45,305 |
|
Total non current liabilities |
|
136,288 |
84,559 |
|
|
|
|
|
|
Liabilities associated with assets held for sale |
13 |
17,441 |
14,279 |
|
Total liabilities |
|
203,537 |
107,160 |
|
Equity |
|
|
|
|
Share capital |
23 |
12,209 |
9,455 |
|
Share premium |
24 |
12,408 |
12,585 |
|
Options and warrants reserve |
24 |
13,978 |
2,185 |
|
Own shares held in trust |
24 |
(332) |
(1,320) |
|
Merger reserve |
24 |
198,987 |
78,208 |
|
Foreign currency translation reserve |
24 |
(7,441) |
(10,595) |
|
Special reserve |
24 |
175,281 |
175,281 |
|
Retained losses |
24 |
(57,877) |
(17,422) |
|
Attributable to the equity shareholders of the company |
|
347,213 |
248,377 |
|
Total liabilities and equity |
|
550,750 |
355,537 |
These financial statements on pages 53 to 81 were approved by the directors and authorised for issue on2 June 2026 and are signed on their behalf by:
Samuel Moody
Chief Executive Officer
Rockhopper Exploration plc Registered Company Number: 05250250
The notes on pages 57 to 81 form an integral part of these consolidated financial statements.
|
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
|||||||||
|
for the year ended 31 December 2025 |
|||||||||
|
|
Share capital |
Share premium |
Options and warrants reserve |
Shares held in trust |
Merger reserve |
Foreign currency translation reserve |
Special reserve |
Retained losses |
Total equity |
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
|
Balance at 31 December 2023 |
9,196 |
10,181 |
2,109 |
(1,320) |
78,208 |
(8,501) |
175,281 |
(65,034) |
200,120 |
|
Profit for the year |
- |
- |
- |
- |
- |
- |
- |
47,612 |
47,612 |
|
Other comprehensive loss for the year |
- |
- |
- |
- |
- |
(2,094) |
- |
- |
(2,094) |
|
Total comprehensive profit for the year |
- |
- |
- |
- |
- |
(2,094) |
- |
47,612 |
45,518 |
|
Share based payments (note 8) |
- |
- |
76 |
- |
- |
- |
- |
- |
76 |
|
Share issues (net of expenses) |
259 |
2,404 |
- |
- |
- |
- |
- |
- |
2,663 |
|
Other transfers |
- |
- |
- |
- |
- |
- |
- |
- |
- |
|
Balance at 31 December 2024 |
9,455 |
12,585 |
2,185 |
(1,320) |
78,208 |
(10,595) |
175,281 |
(17,422) |
248,377 |
|
Loss for the year |
- |
- |
- |
- |
- |
- |
- |
(39,681) |
(39,681) |
|
Other comprehensive profit for the year |
- |
- |
- |
- |
- |
3,154 |
- |
- |
3,154 |
|
Total comprehensive profit/(loss) for the year |
- |
- |
- |
- |
- |
3,154 |
- |
(39,681) |
(36,527) |
|
Transfers |
- |
- |
(258) |
1,032 |
- |
- |
- |
(774) |
- |
|
Issue of shares |
2,754 |
(177) |
11,905 |
(44) |
120,779 |
- |
- |
- |
135,217 |
|
Share based payments (note 8) |
- |
- |
146 |
- |
- |
- |
- |
- |
146 |
|
Balance at 31 December 2025 |
12,209 |
12,408 |
13,978 |
(332) |
198,987 |
(7,441) |
175,281 |
(57,877) |
347,213 |
See note 24 for a description of each of the reserves of the Group.
Other transfers relate to Shares held in trust where they have been used to satisfy exercised options.
The notes on pages 57 to 81 form an integral part of these consolidated financial statements.
|
CONSOLIDATED STATEMENT OF CASH FLOWS |
|
|||
|
for the year ended 31 December 2025 |
||||
|
|
Notes |
2025 $'000 |
2024 $'000 |
|
|
Cash flows from operating activities |
|
|
|
|
|
(Loss)/profit for the year |
|
(39,681) |
47,612 |
|
|
Depreciation of property, plant and equipment |
|
8 |
19 |
|
|
Share based payment expense |
8 |
146 |
76 |
|
|
Written off exploration costs |
15 |
254 |
393 |
|
|
Finance expenses |
|
2,631 |
595 |
|
|
Finance income |
|
(2,180) |
(1,322) |
|
|
Foreign exchange |
|
(4,859) |
(3,786) |
|
|
Tax credit/(expense) |
12 |
(3,866) |
30,421 |
|
|
Operating cash flows before movements in working capital |
|
(47,547) |
74,008 |
|
|
Changes in working capital: |
|
|
|
|
|
Decrease/(increase) in receivables |
|
44,857 |
(60,613) |
|
|
Increase in payables |
|
30,354 |
386 |
|
|
Increase/(decrease) in provisions |
|
992 |
(2,397) |
|
|
Cash generated by operating activities |
|
28,656 |
11,384 |
|
|
Tax paid |
|
(5,327) |
- |
|
|
Cash flows from investing activities |
|
|
|
|
|
Purchase of PPE & intangibles |
|
(45) |
(1,834) |
|
|
Cash and term deposits classified as held for sale |
|
(8,161) |
(17) |
|
|
Restricted cash |
|
- |
542 |
|
|
Term deposit movements |
|
8,240 |
(15,073) |
|
|
Interest on term deposits |
|
858 |
- |
|
|
Cash flow generated/(used in) investing activities |
|
892 |
(16,382) |
|
|
Cash flows from financing activities |
|
|
|
|
|
Exercise of share options |
|
189 |
2,213 |
|
|
Issuance of shares and warrants net of costs |
|
135,028 |
- |
|
|
Loan funding |
|
9,102 |
- |
|
|
Prepaid financing costs |
|
(12,824) |
- |
|
|
Lease liability payments |
|
- |
(11) |
|
|
Cash flow from financing activities |
|
131,495 |
2,202 |
|
|
Exchange gain/loss on cash and cash equivalents |
|
988 |
224 |
|
|
Net cash flow |
|
155,716 |
(2,796) |
|
|
Cash and cash equivalents brought forward |
|
915 |
3,487 |
|
|
Cash and cash equivalents carried forward |
|
157,619 |
915 |
|
The notes on pages 57 to 81 form an integral part of these consolidated financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2025
1. Material accounting policies
1.1 Group and its operations
Rockhopper Exploration plc, the 'Company', a public limited company quoted on AIM, incorporated and domiciled in the United Kingdom ('UK'), together with its subsidiaries, collectively 'the 'Group' holds certain exploration licences for the exploration and exploitation of oil and gas in the Falkland Islands. In addition, it has operations in the Greater Mediterranean based in Italy which have been classified as discontinued operations and whose assets and liabilities are classified as held for sale. The registered office of the Company is Warner House, 123 Castle Street, Salisbury, Wiltshire, SP1 3TB.
1.2 Statement of compliance
The consolidated financial statements of the Group have been prepared on a going concern basis in accordance with UK adopted International Accounting Standards in conformity with the requirements of the Companies Act 2006. The consolidated financial statements were approved for issue by the board of directors on 2 June 2026 and are subject to approval at the Annual General Meeting of shareholders on 30 June 2026.
1.3 Basis of preparation
The results upon which these financial statements have been based were prepared using the accounting policies set out below. These policies have been consistently applied unless otherwise stated.
These consolidated financial statements have been prepared under the historical cost convention with the exception of certain items which are measured at fair value.
Items included in the results of each of the Group's entities are measured in the currency of the primary economic environment in which that entity operates (the "functional currency"). The consolidated financial statements are presented in US Dollars ($), which is Rockhopper Exploration plc's functional currency.
All values are rounded to the nearest thousand dollars ($'000) or thousand pounds (£'000), except when otherwise indicated.
1.4 Change in accounting policy
Changes in accounting standards
In the current year the following new and revised Standards and Interpretations have been adopted. None of these have a material impact on the Group's annual results.
- Lack of Exchangeability (Amendment to IAS 21)
- IFRS Practice Statement 1 Management Commentary
New accounting pronouncements
The following amendments are effective for the period beginning 1 January 2026:
- Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7)
- Annual Improvements to IFRS Accounting Standards - Volume 11
- Contracts Referencing Nature dependent Electricity (Amendments to IFRS 9 and IFRS 7)
The following amendments are effective for the period beginning 1 January 2027:
- IFRS 18 Presentation and Disclosure in Financial Statements
- IFRS 19 Subsidiaries without Public Accountability: Disclosures
- IFRS for SMEs Accounting Standard - Third Edition
The Directors are assessing the impact of the above Standards, Amendments and Interpretations. IFRS 18 is expected to impact presentation but not measurement, and no material impact on the Group's financial position or results is expected.
1.5 Going concern
The financial statements have been prepared on a going concern basis which the Directors consider to be appropriate for the reasons set out below. The Directors have assessed the Group's ability to continue as a going concern for a period of at least twelve months from the date of approval of the financial statements, being to 30 June 2027 (the "Assessment Period").
Background and financial position
The Group is an oil and gas development company whose principal asset is its interest in Phase 1 of the Sea Lion field (the "Project"), located offshore to the north of the Falkland Islands within the Group's PL032 licence. The Group is currently pre-revenue and has not yet achieved first oil. The Group's strategy is to advance the Project through to first oil, following which revenue generation is expected to commence.
As at 31 December 2025, the Group had cash and cash equivalents of US$157.6 million, term deposit of US$13.4 million and an undrawn committed Senior Debt Facility of US$350.0 million (together, total available liquidity of US$521.0 million). The Group has no producing assets. The Group concluded a successful fundraising on 31 December 2025, receiving gross proceeds of US$136 million, and financial close on the Project financing was achieved on 22 December 2025.
Assessment period and base case
The Directors have assessed the Group's going concern position over the Assessment Period by reference to detailed cash flow forecasts prepared by management covering sources and uses of funds to 30 June 2027. The base case incorporates the Sea Lion Phase 1 Development programme consistent with the approved banking model together with corporate and administrative expenditures and tax obligations arising in the period.
Under the base case, the Group's existing cash resources are projected to be sufficient to meet all committed expenditure within the Assessment Period.
Senior Debt Facility
The Group has in place a Senior Debt Facility of US$350 million to part-fund the Project. The Facility was entirely undrawn as at 31 December 2025.
First drawdown under the Facility is forecast to occur toward the end of the Assessment Period, subject to the satisfaction of conditions precedent customary to a financing of this nature. Management has reviewed the conditions precedent to first drawdown and considers all are reasonably capable of being satisfied in accordance with the project timeline. The most significant condition for the purposes of this assessment is the requirement, prior to each drawdown, for an updated funding statement to confirm that no funding shortfall exists. As noted above, no funding shortfall currently exists, and management does not consider this condition to be at risk of not being met within the Assessment Period.
Key considerations within the Assessment Period
In forming their view, the Directors have considered a number of factors bearing on the Group's ability to continue as a going concern within the Assessment Period. These include the level and nature of project costs expected to be incurred, the resilience of the funding position to potential cost movements, the ongoing availability of the Senior Debt Facility, and the Group's compliance with applicable covenants and financial conditions.
The total cost estimate for the Sea Lion Phase 1 Development has been externally validated and is predominantly based on executed contracts. The majority of costs within the Assessment Period are fixed or substantially fixed in nature. The Directors are satisfied that, having regard to the contingencies included in the approved cost estimate, the additional funding buffer provided through the Equity Overrun Support mechanism, and the cost-sharing structure under the Co-Venturer Loan arrangements with the Operator (under which the Group is required to fund only one-third of its share of project capital costs prior to completion), the Group's funding position is resilient to reasonably foreseeable cost movements within the Assessment Period.
The Directors have also considered whether any circumstances are likely to arise that would require the Banking Case underpinning the Facility to be redetermined within the Assessment Period. Having assessed the relevant trigger conditions - including significant movements in proved reserves, oil price below contingency levels, significant cost escalation over the contingency levels and the results of the first producer well - the Directors consider the likelihood of Banking Case redetermination to be remote within the Assessment Period due to the long-term nature of the project. The Facility Agreement also provides that Lenders cannot refuse to fund solely because a trigger event has occurred, which provides additional assurance as to the availability of the Facility.
Sensitivity analysis has been performed, including a reasonable downside scenario modelling on gross capital expenditure increases above the base case. Under all scenarios considered, the Group maintains sufficient liquidity within the Assessment Period.
Post-Assessment Period and longer-term funding
The Assessment Period considered by the Directors for the purpose of this going concern assessment runs to 30 June 2027. Beyond that date, the Project will be at a relatively early stage of what is a substantial, multi-year development programme, and first oil is not expected to be achieved until after the Assessment Period. The Project is large in scale and, as with any development of this nature, there are a number of factors that could, over the longer term, give rise to a need for the Group to secure additional financial resources. These could include, amongst other things, movements in the oil price environment, cost escalation above current contingencies, differences in reservoir performance relative to current expectations, and the timing and terms on which the Senior Debt Facility is drawn. The nature and quantum of any such requirement, and the sources from which it might be met, would depend on the circumstances prevailing at the time. Whilst the Directors have not undertaken a detailed assessment of post-Assessment Period funding requirements - which falls outside the scope of this going concern review - they would expect, in the ordinary course, that a range of potential funding options would be available to the Group including further equity or debt financing. However, no assurance can be given that additional funding would be available, or available on commercially acceptable terms, if and when required.
Conclusion
Having considered the factors described above - in particular the Group's current liquidity position, the base case cash flow forecasts, the resilience of the funding position to reasonably foreseeable downside scenarios, and the availability of the Senior Debt Facility within the Assessment Period - the Directors are satisfied that the Group has adequate resources to continue as a going concern for the Assessment Period. Accordingly, they consider it appropriate to adopt the going concern basis of accounting in preparing these financial statements. The Directors do not consider that any material uncertainty exists that would cast significant doubt on the Group's ability to continue as a going concern within the Assessment Period.
1.6 Material accounting policies
(A) Basis of accounting
The Group has identified the accounting policies that are most significant to its business operations and the understanding of its results. These accounting policies are those which involve the most complex or subjective decisions or assessments, and relate to the capitalisation of exploration expenditure. The determination of this is fundamental to the financial results and position and requires management to make a complex judgement based on information and data that may change in future periods.
Since these policies involve the use of assumptions and subjective judgements as to future events and are subject to change, the use of different assumptions or data could produce materially different results. The measurement basis that has been applied in preparing the results is historical cost.
The significant accounting policies adopted in the preparation of the results are set out below.
(B) Basis of consolidation
The Group financial statements consolidate the financial statements of the Company and its subsidiary undertakings drawn up to 31 December 2025. Subsidiaries are those entities over which the Group has control including those held for sale. Control is achieved where the Group has the power over the subsidiary, is exposed, or has rights to variable returns from the subsidiary and has the ability to use its power to affect its returns. All subsidiaries are 100 per cent owned by the Group and there are no non-controlling interests.
The results of subsidiaries acquired or disposed of during the year are included in the income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries acquired to bring the accounting policies used into line with those used by other members of the Group.
All intercompany balances have been eliminated on consolidation.
(C) Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker as required by IFRS8 Operating Segments. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the board of directors.
The Group's operations are made up of three segments, the oil and gas exploration and production activities in the geographical regions of the Falkland Islands and the Greater Mediterranean region as well as its corporate activities mainly centered in the UK.
(D) Oil and gas assets
The Group applies the successful efforts method of accounting for exploration and evaluation ("E&E") costs, having regard to the requirements of IFRS6 - 'Exploration for and evaluation of mineral resources'.
Exploration and evaluation ("E&E") expenditure Expensed exploration & evaluation costs
Expenditure on costs incurred prior to obtaining the legal rights to explore an area, geological and geophysical costs are expensed immediately to the income statement.
Capitalised intangible exploration and evaluation assets
All directly attributable E&E costs are initially capitalised in well, field, prospect, or other specific, cost pools as appropriate, pending determination.
Treatment of intangible E&E assets at conclusion of appraisal activities
Intangible E&E assets related to each cost pool are carried forward until the existence, or otherwise, of commercial reserves have been determined, subject to certain limitations including review for indicators of impairment. If commercial reserves have been discovered, the carrying value, after any impairment loss, of the relevant E&E assets, are then reclassified as development and production assets within property plant and equipment. However, if commercial reserves have not been found, the capitalised costs are charged to expense.
Development and production assets
Development and production assets, classified within property, plant and equipment, are accumulated generally on a field-by-field basis and represent the costs of developing the commercial reserves discovered and bringing them into production, together with the E&E expenditures incurred in finding commercial reserves transferred from intangible E&E assets.
Depreciation of producing assets
The net book values of producing assets are depreciated generally on a field-by-field basis using the unit-of-production method by reference to the ratio of production in the year and the related commercial reserves of the field, taking into account the future development expenditure necessary to bring those reserves into production.
Disposals
Net cash proceeds from any disposal of an intangible E&E asset are initially credited against the previously capitalised costs. Any surplus proceeds are credited to the income statement.
Decommissioning
Provision for decommissioning is recognised in full when the related facilities are installed. The amount recognised is the present value of the estimated future expenditure. A corresponding amount equivalent to the provision is also recognised as part of the cost of the related oil and gas property. This is subsequently depreciated as part of the capital costs of the production facilities. Any change in the present value of the estimated expenditure is dealt with prospectively as an adjustment to the provision and the oil and gas property. The unwinding of the discount is included in finance cost.
(E) Foreign currency translation Functional and presentation currency:
Items included in the results of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates, the functional currency. The consolidated financial statements are presented in US$ as this best reflects the economic environment of the oil exploration sector in which the Group operates. The Group maintains the financial statements of the parent and subsidiary undertakings in their functional currency. Where applicable, the Group translates subsidiary financial statements into the presentation currency, US$, using the closing rate method for assets and liabilities which are translated at the rate of exchange prevailing at the balance sheet date and rates at the date of transactions for income statement accounts. Differences are taken through the Statement of Comprehensive Income to reserves.
Transactions and balances:
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are expensed in the income statement, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.
The year end rates of exchange were:
|
|
31 December 2025 |
31 December 2024 |
|
£ : US$ |
1.35 |
1.25 |
|
€ : US$ |
1.17 |
1.04 |
(F) Revenue and income
There is no revenue in either this or the prior period.
Investment income consists of interest receivable for the period. Interest income is recognised as it accrues, taking into account the effective yield on the investment.
(G) Non-derivative financial instruments
Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group has become a party to the contractual provisions of the instrument.
(i) Other receivables
Other receivables are initially measured at fair value. Those that meet the following conditions are measured subsequently at fair value through other comprehensive income (FVTOCI):
· the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets; and
· the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL).
The Group recognises an allowance for expected credit losses for all debt instruments not held at fair value through profit or loss. Expected credit losses are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. For intercompany loans that are repayable on demand, expected credit losses are recognised on the assumption that repayment of the loan is demanded at the reporting date. Where the borrower could not repay the loan if demanded at the reporting date, the expected manner of recovering the loan is considered in measuring the expected credit losses. This may include a repay over time strategies discounted at the loan's effective interest rate, or a fire sale of less liquid assets.
(ii) Restricted cash
Restricted cash is disclosed separately on the face of the balance sheet and denoted as restricted when it is not under the exclusive control of the Group. All amounts relate to balances held as security in relation to property leases.
(iii) Term deposits
Term deposits are disclosed separately on the face of the balance sheet when their term is equal or greater than one month and they are unbreakable.
(iv) Cash and cash equivalents
They are stated at carrying value which is deemed to be fair value. Cash and cash equivalents comprise instant access bank balances as well as a small amount of cash in hand.
(v) Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.
(vi) Account and other payables
Account payables are initially recognised at fair value and subsequently at amortised cost using the effective interest method.
(vii) Insurance Liability
The Insurance Liability recognised in the year relates to an insurance policy. Under its terms the Group does not have the unconditional right to avoid delivering cash and hence it has been recognised as a financial liability under IFRS 9. As such the liability is fair valued on initial recognition and adjusted for movements in fair value through profit and loss in subsequent periods
(viii) Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
(H) Income taxes and deferred taxation
The current tax amount is based on the taxable profits or losses of the year, after any adjustments in respect of prior years. Tax, including tax relief for losses if applicable, is allocated over profits before tax and amounts charged or credited to reserves as appropriate.
Deferred taxation is recognised in respect of all taxable temporary differences that have originated but not reversed at the balance sheet date where a transaction or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more, tax, with the exception that deferred tax assets are recognised only to the extent that its considered probable that there will be suitable taxable profits from which the future reversal of the underlying temporary differences can be deducted.
Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which temporary differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
Where there are uncertainties over how to apply the recognition and measurement requirements in IAS 12 the group applies IFRIC 23, Uncertainty over Income TaxTreatment.
(I) Share based remuneration
The Group issues equity settled share based payments to certain employees. Equity settled share based payments are measured at fair value (excluding the effect of non market based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity settled share based payments is expensed on a straight line basis over the vesting period, based on the Group's estimate of shares that will eventually vest and adjusted for non market based vesting conditions.
Cash settled share based payment transactions result in a liability. Services received and liabilities incurred are measured initially at fair value of the liability at grant date, and the liability is remeasured each reporting period until settlement. The liability is recognised on a straight line basis over the period that services are rendered.
(J) Capital commitments
Capital commitments include all projects for which specific board approval has been obtained up to the reporting date. Projects still under investigation for which specific board approvals have not yet been obtained are excluded.
2. Use of estimates, assumptions and judgements
The Group makes estimates, assumptions and judgements that affect the reported amounts of assets and liabilities. Estimates, assumptions and judgements are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed in the relevant note as is sensitivity analysis as required. The key areas identified and the relevant note are as follows:
Fair value of Monetisation Agreement and Insurance Liability (note 10) - estimates
To calculate the fair value of the Monetisation Agreement and the directly associated Insurance Liability involved estimation. Future cash flows under the agreement are contractual and it was measured at fair value using a discounted cash flow basis. This required estimating the chance of success in proceedings, costs of proceedings as well as the amount and timing of these cash flows and the discount rate applied.
Carrying value of Development and Production assets (note 16) - judgements
During the period Management made an assessment that commercial viability and technical feasibility was achieved in the period and the asset was transferred to development and production assets. As part of the transfer the assets were assessed for impairment, as detailed in note 15 and note 16, and found that the commercially viable quantities of resources meant that the carrying amount is likely to be recovered in full.
Tax payable (note 20) - estimates
The Group recognised an estimated Non-current tax payable of $20.9 million arising from the historic farm-outs in the Falkland Islands which in the period was finalised with the Falkland Islands Tax Authority. Following this agreement the only uncertainty is the timing of future tax payments as they are all a function of first oil.
Decommissioning costs (note 21) -estimates
Estimates are made around appropriate inflation and discount rates to be applied as well as the timing of any future decommissioning. Decommissioning costs are uncertain and management's cost estimates can vary in response to many factors, including changes to the relevant legal requirements, the emergence of new technology or experience at other assets. The expected timing, work scope and amount of expenditure may also change.
3. Segmental information
The Group's operations are located and managed in three geographically distinct business units; namely the Falkland Islands, the Greater Mediterranean, and Corporate (includes UK and the Ombrina Mare Arbitration). Some of the business units currently do not generate any revenue or have any material operating income. The business is only engaged in one business, that of upstream oil and gas exploration and production.
|
|
Falkland Islands |
Corporate |
Total (Continuing) |
Greater Mediterranean (Discontinued) |
|
Total (Continuing and Discontinued) |
|||
|
Year ended 31 December 2025 |
$'000 |
$'000 |
$'000 |
$'000 |
|
$'000 |
|||
|
Cost of sales |
- |
- |
- |
(1,459) |
(1,459) |
||||
|
Gross loss |
- |
- |
- |
(1,459) |
(1,459) |
||||
|
Exploration and evaluation expense |
(254) |
- |
(254) |
- |
(254) |
||||
|
Administrative expenses |
- |
(9,770) |
(9,770) |
200 |
(9,570) |
||||
|
Charge for share based payments |
- |
(146) |
(146) |
- |
(146) |
||||
|
Foreign exchange gain |
- |
2,981 |
2,981 |
- |
2,981 |
||||
|
Results from operating activities and other income |
(254) |
(6,935) |
(7,189) |
(1,259) |
(8,448) |
||||
|
Other income |
- |
35,179 |
35,179 |
- |
35,179 |
||||
|
Other expenses |
- |
(69,726) |
(69,726) |
- |
(69,726) |
||||
|
Finance income |
- |
2,086 |
2,086 |
94 |
2,180 |
||||
|
Finance expense |
(2,257) |
(97) |
(2,354) |
(337) |
(2,691) |
||||
|
(Loss) before tax |
(2,511) |
(39,493) |
(42,004) |
(1,502) |
(43,506) |
||||
|
Tax |
(2,543) |
6,368 |
3,825 |
- |
3,825 |
||||
|
Loss for year |
(5,054) |
(33,125) |
(38,179) |
(1,502) |
(39,681) |
||||
|
Reporting segments assets |
348,580 |
192,565 |
541,145 |
9,605 |
550,750 |
||||
|
Reporting segments liabilities |
155,593 |
30,503 |
186,096 |
17,441 |
203,537 |
||||
|
Depreciation and impairments |
254 |
8 |
262 |
- |
262 |
||||
|
|
|
|
|
|
|
||||
3. Segmental information (continued)
|
|
Falkland Islands |
Corporate |
Total (Continuing) |
Greater Mediterranean (Discontinued) |
Total (Continuing and Discontinued) |
|
Year ended 31 December 2024 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
Cost of sales |
- |
- |
- |
1,685 |
1,685 |
|
Gross profit |
- |
- |
- |
1,685 |
1,685 |
|
Exploration and evaluation expense |
(393) |
- |
(393) |
- |
(393) |
|
Administrative expenses |
- |
(3,330) |
(3,330) |
(130) |
(3,460) |
|
Charge for share based payments |
- |
(76) |
(76) |
- |
(76) |
|
Foreign exchange gain |
- |
170 |
170 |
- |
170 |
|
Results from operating activities and other income |
(393) |
(3,236) |
(3,629) |
1,555 |
(2,074) |
|
Other income |
- |
79,802 |
79,802 |
- |
79,802 |
|
Other expenses |
- |
(1,024) |
(1,024) |
- |
(1,024) |
|
Finance income |
- |
1,927 |
1,927 |
- |
1,927 |
|
Finance expense |
(285) |
(11) |
(296) |
(302) |
(598) |
|
Profit before tax |
(678) |
77,458 |
76,780 |
1,253 |
78,033 |
|
Tax |
(22,300) |
(8,121) |
(30,421) |
- |
(30,421) |
|
Profit for year |
(22,978) |
69,337 |
46,359 |
1,253 |
47,612 |
|
Reporting segments assets |
271,110 |
83,224 |
354,334 |
1,203 |
355,537 |
|
Reporting segments liabilities |
84,559 |
8,322 |
92,881 |
14,279 |
107,160 |
|
Depreciation and impairments |
393 |
19 |
412 |
- |
412 |
|
|
|
|
|
|
|
|
4. Exploration and evaluation expenses |
|
|
|
|
2025 |
2024 |
|
|
$'000 |
$'000 |
|
Exploration and evaluation assets written off (see note 15) |
254 |
393 |
|
|
254 |
393 |
|
5. Administrative expenses |
2025 |
2024 |
|
|
$'000 |
$'000 |
|
Directors' remuneration excluding benefits and pensions (see note 6) |
1,980 |
844 |
|
Other employees' salaries |
1,858 |
1,293 |
|
National insurance costs |
2,808 |
1,027 |
|
Pension costs |
187 |
172 |
|
Employee benefit costs |
61 |
62 |
|
Total staff costs |
6,894 |
3,398 |
|
Amounts reallocated |
(550) |
(1,147) |
|
Total staff costs charged to administrative expenses |
6,344 |
2,251 |
|
Auditors' remuneration (see note 7) |
413 |
212 |
|
Other professional fees |
2,125 |
416 |
|
Other |
1,134 |
733 |
|
Depreciation |
8 |
19 |
|
Amounts reallocated |
(254) |
(301) |
|
|
9,770 |
3,330 |
The average number of full time equivalent staff employed during the year was 7 (2024: 7). As at the year end the Group employed (including part time) 9 staff, 7 of which were in the UK and 2 in Italy.
Amounts reallocated relate to the costs of staff and associated overhead in relation to non administrative tasks. These costs are allocated to relevant expenses or capitalised as part of the intangible exploration and evaluation assets as appropriate.
|
6. Directors' remuneration |
|
|
|
|
2025 $'000 |
2024 $'000 |
|
Executive salaries |
1,688 |
585 |
|
Company pension contributions to money purchase schemes & pension cash allowance |
66 |
62 |
|
Benefits |
15 |
13 |
|
Non-executive fees |
292 |
259 |
|
|
2,061 |
919 |
|
The total remuneration of the highest paid director was: |
|
|
|
|
2025 |
2024 |
|
|
£'000 |
£'000 |
|
Annual salary and bonuses |
1,299 |
458 |
|
Money purchase pension schemes & pension cash allowance |
50 |
49 |
|
Benefits |
6 |
5 |
|
|
1,355 |
512 |
|
|
|
|
Interest in outstanding share options, LTIPs and SARs, by director, are also separately disclosed in the directors' remuneration report.
|
7. Auditors' remuneration |
|
|
|
|
2025 $'000 |
2024 $'000 |
|
Fees payable to the Company's auditors for the audit of the Company's annual financial statements |
357 |
186 |
|
Fees payable to the Company's auditors and its associates for other services: |
|
|
|
Audit of the accounts of subsidiaries |
56 |
26 |
|
|
413 |
212 |
|
8. Charge for share based payments |
|
|
|
The charge for share based payments relate to options granted to employees of the Group. |
|
|
|
|
2025 $'000 |
2024 $'000 |
|
Charge for option scheme |
146 |
76 |
|
|
146 |
76 |
Option scheme and Long term incentive plan
Various options have been granted in historic periods. Vesting dates and exercise prices are detailed in the table below and commentary thereto.
LTIP awards relate to a historic scheme and current year grants. During the year 2,177,456 options were granted. The awards are structured as nominal cost options and, subject to meeting specific performance criteria, will normally vest on future dates. 887,931 of these options were granted to the CEO, and will be subject to an additional one year holding period after vesting.
The percentage of awards which will vest is dependent on total shareholder return ("TSR") measured over a three year period ending on 30 June 2028 . Performance measurement for these awards will be based on the Company's average share price with the percentage of awards which will vest will being dependent on TSR between these points. The options were valued using a Monte Carlo model and the TSR performance condition is classed as a market-based performance condition which is factored in to the valuation as per IFRS 2.
The following movements occurred during the year:
|
Issue date |
Vesting date |
Exercise price |
Expiry date |
At 31 December 2024 |
Granted |
Exercised |
At 31 December 2025 |
|
Option Scheme |
|
|
|
|
|
|
|
|
18 May 2020 |
Vested |
£0.01 |
18 May 2030 |
5,258,889 |
- |
- |
5,258,889 |
|
18 May 2020 |
Vested |
£0.0625 |
18 May 2030 |
15,350,000 |
- |
(2,250,000) |
13,100,000 |
|
25 Jan 2023 |
Variable** |
£0.07 |
25 Jan 2033 |
4,500,000 |
- |
- |
4,500,000 |
|
|
|
|
|
25,108,889 |
- |
(2,250,000) |
22,858,889 |
|
Long Term Incentive Plan |
|
|
|
|
|
|
|
|
16 Jun 2017 |
Vested |
£nil |
16 June 2027 |
2,352,000 |
- |
(960,000) |
1,392,000 |
|
31 Jul 2019 |
Vested |
£nil |
31 July 2029 |
2,337,501 |
- |
(687,500) |
1,650,001 |
|
30 Sept 2025 |
01 Jul 2028 |
£0.01 |
30 Sept 2035 |
- |
2,177,456 |
- |
2,177,456 |
|
|
|
|
|
4,689,501 |
2,177,456 |
(1,647,500) |
5,219,457 |
** These options vest in three tranches of 1.5 million each at project sanction, first oil, and project completion. The value of these options was $500,000 and made with reference to services received. The cost of the options was offset against the liability in relation to the service provided.
|
9. Foreign exchange movement |
|
|
2025 $'000 |
2024 $'000 |
|
Other foreign exchange movements |
|
|
2,981 |
170 |
|
Total net foreign exchange gain |
|
|
2,981 |
170 |
10. Monetisation agreement and Insurance proceeds
Background:
In August 2022, pursuant to an ICSID arbitration against the Italian Republic, which commenced in 2017, Rockhopper was awarded approximately €190 million plus interest and costs following a unanimous decision by the ICSID appointed arbitral Tribunal that Italy had breached its obligations under the Energy Charter Treaty (the "Award").
Rockhopper submitted a letter to the Italian Republic in September 2022 formally requesting payment of €247 million, representing the Award amount plus accrued interest from 29 January 2016 to 23 August 2022 and costs.
Following Italy's request on 28 October 2022 to seek annulment of the Award, an ad hoc Committee was constituted to hear relevant arguments and ultimately make a ruling on Italy's request to annul the Award.
On 20 December 2023, Rockhopper announced its entry into a funded participation agreement (the "Monetisation Agreement") with a regulated specialist fund that has experience in investing in legal assets (the "Specialist Fund") to monetise its Award.
Under the terms of the Monetisation Agreement, the Specialist Fund agreed to make cash payments to Rockhopper in up to three tranches:
· Tranche 1 - Rockhopper retain €19 million of an upfront payment of €45million on completion. As previously disclosed, Rockhopper entered into a litigation funding agreement in 2017 under which all costs relating to the Arbitration from commencement to the rendering of the Award were paid on its behalf by a separate specialist arbitration funder (the "Original Arbitration Funder"). That agreement entitled the Original Arbitration Funder to a proportion of any proceeds from the Award or any monetisation of the Award. The Original Arbitration Funder was paid €26 million of the Tranche 1 proceeds to discharge all of Rockhopper's liabilities under the agreement with the Original Arbitration Funder.
· Tranche 2 - Additional contingent payment of €65 million upon a successful annulment outcome. Should the Award be partially annulled and the quantum reduced as a result, then Tranche 2 will be reduced such that the amounts under Tranche 1 and Tranche 2 shall be adjusted downward on a pro-rata basis. For example, if the quantum of the Award is reduced by 20%, then the amounts under Tranche 1 and Tranche 2 shall be reduced by 20%. For the avoidance of doubt, the amounts under Tranche 1 and Tranche 2 shall not reduce below €45m in any circumstance.
· Tranche 3 - Potential payment of 20% on recovery of amounts in excess of 200% of the Specialist Fund's total investment including costs.
In June 2024 the precedent conditions were satisfied and Rockhopper received its initial consideration of €19 million. Management determined that the Monetisation Agreement is a financial instrument within the scope of IFRS 9 and as such should be fair valued on initial recognition and subsequently through profit and loss. This led to a US$58.2 million current receivable in the balance sheet as at 31 December 2024.
In October 2024 the Group decided, in line with normal market practice, that insuring to protect shareholders against loss resulting from an annulment of the Award to be the most prudent course of action. The insurance arrangements (the "Insurance") ensured that in the event that the Italian Republic succeeded in having the entire Award annulled or in the event of partial annulment, the combination of the Tranche 2 payment and the insurance payout shall entitle Rockhopper to a total no less than €31 million. The total cost of the Insurance, which including applicable taxes and underwriting fees, is €4 million.
In June 2025 it was announced that Italy had been successful in its attempts to annul the Award (the "Annulment"). Under the terms of the Monetisation Agreement the Tranche 2 payment will now be €nil. As such the Group submitted claims and statements of loss under the terms of the Insurance. The lead insurer has confirmed that the loss has been triggered and, as a result, Rockhopper recognised a receivable in June 2025 for the full €31 million amount ("Insurance Proceeds") to which it is entitled under the Insurance. The money was received in August 2025 in line with terms of the Insurance.
Under the terms of the Insurance to the extent that Rockhopper makes any future financial recovery from any new arbitration ("Recovered Amounts"), through the Monetisation Agreement or otherwise, after deductions for any reasonable costs and expenses incurred, that recovery will be utilised to reimburse the insurers ("Insurance Liability") in respect of the Insurance Proceeds.
A new request for arbitration was submitted in September 2025. Under the terms of the Monetisation Agreement the costs of contesting the new request for arbitration are borne by the Specialist Fund.
Fair value of the monetisation agreement
Even though the claim now has been resubmitted, the Monetisation Agreement anticipated this event and includes future economic flows to the Group arising from the contractual arrangements in place. Given some or all of the future proceeds of the Monetisation Agreement will be passed through to insurers Management have considered whether the derecognition criteria IFRS 9 have been met and concluded they have not. The derecognition criteria have to be applied to the whole Monetisation Agreement as neither a part or pro rata part of a specifically identified cash flow can be identified. As noted there is a pass through obligation but Rockhopper has maintained a potential subordinated retained interest and control of the Monetisation Agreement.
As a result, Management's judgement is to continue to recognise the the Monetisation Agreement as a financial asset at fair value through profit or loss.
In the period the fair value of the Monetisation Agreement reduced from $58.2m to $22.1m resulting in an overall loss through a combination of changes in fair value and foreign exchange of $36.1m recognised in the income statement.
In estimating the fair value of the Monetisation Agreement management has made the following judgements and estimates:
- As Rockhopper is not due any amounts for Tranche 2 under the Monetisation Agreement the receipts under Tranche 2 is now $nil.
- The likelihood of receipts under Tranche 3 have now increased as they are linked to the costs incurred by the Specialist Fund which has now been reduced as they will no longer have to make a payment for Tranche 2 to Rockhopper. This increases the likelihood that if a future arbitration finds in Rockhopper's favour the award recovery will be in excess of 200% of the Specialist Funds costs.
- The fair value of Tranche 3 has been estimated on the basis of probability weighted expected cash flows. This is inherently subjective and includes judgements on amongst other things, the chance of success in the resubmitted arbitration, the expected value of any recovered amounts under any new award, the cost of achieving those recoveries as well as the time taken to achieve any recovery.
Insurance receivable, liability and costs
Following the Annulment €31 million was recognised as a receivable at 30 June 2025, which was subsequently received in August 2025.
Management considered the terms of the insurance policy and determined that the Group does not have the unconditional right to avoid delivering cash and hence a financial liability should be recognised under IFRS 9. As such the liability should be fair valued on initial recognition and subsequently through profit and loss. The fair value of the insurance liability has been estimated on the basis of probability weighted expected cash flows using the same inputs as the fair value of the Tranche 3 proceeds as it represents the expected pass through of the proceeds of Tranche 3, capped at a maximum of €31 million.
The cost of the Insurance was being spread over the life of the policy (which materially exceeded the expected time to receive an outcome from the Award annulment). As such the majority of this cost was recorded as a prepayment as at 31 December 2024. Given the claim on the Insurance, during the period, the US$3.9 million balance of this prepayment has been recognised in Other Expenses in the period.
Financial impact
The impact of the above on the income statement and balance sheet is set out below.
Income statement
|
|
|
|
2025 $'000 |
2024 $'000 |
|
Other income |
|
|
|
|
|
Insurance proceeds received |
|
|
35,179 |
- |
|
Monetisation Agreement - fair value movement |
|
|
- |
79,802 |
|
Total other income |
|
|
35,179 |
79,802 |
|
|
|
|
2025 $'000 |
2024 $'000 |
|
Other expenses |
|
|
|
|
|
IFRS 9 liability for repayment of insurance proceeds |
|
|
(21,645) |
- |
|
Insurance policy cost |
|
|
(3,906) |
(232) |
|
Other costs |
|
|
(1,301) |
(792) |
|
Monetisation Agreement - fair value movement |
|
|
(42,874) |
- |
|
Total other expenses |
|
|
(69,726) |
(1,024) |
Balance sheet
|
|
|
|
2025 $'000 |
2024 $'000 |
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
Monetisation Agreement - fair value (non current assets Financial asset) |
|
|
22,148 |
- |
|
Monetisation Agreement - fair value (included in other receivables note 17) |
|
|
- |
58,228 |
|
Insurance prepayment (included in other receivables note 17) |
|
|
- |
3,906 |
|
Non-current liabilities |
|
|
|
|
|
Insurance liability - potential repayment of proceeds (other payables note 19) |
|
|
(21,645) |
- |
Reconciliation of movements on Monetisation Agreement fair value
|
|
|
|
2025 $'000 |
2024 $'000 |
|
|
|
|
|
|
|
Monetisation Agreement - fair value - opening |
|
|
58,228 |
- |
|
Fair value movement |
|
|
(41,682) |
81,124 |
|
Cash received |
|
|
- |
(20,556) |
|
FX impact |
|
|
5,602 |
(2,340) |
|
Monetisation Agreement - fair value - closing |
|
|
22,148 |
58,228 |
Cash movements
The majority of movements in the year are non cash, with only the Insurance Proceeds received and Other costs actually pertaining to cashflows in the current year.
Sensitivity
Management believe in the merits of the case but recognise that no outcome is certain. As a result, assumptions and judgements are required in the consideration of probability, timing, and of the value for the recognition of other income and expenses and associated assets and liabilities. In regard to timing, the length of time to recover any amounts is uncertain, but management note that the original arbitration process took circa 9 years, therefore management does not expect any resolution in the near term. The impact of increasing or decreasing the time to recover funds is detailed below in sensitivity one, and is impacted by both the interest that accrues on the award and the impact of discounting the award.
The valuation of the asset and liability are estimated using the same underlying inputs. The valuation is a function of various inputs including; the chance of success in proceedings, assumptions of value of future award granted and received, and the time and cost to recover any award should it be granted.
Given the repayment of the insurance proceeds is capped at an undiscounted value of €31 million, any award below this amount would have an equal and offsetting impact on the fair value of the asset and the liability, with no material net effect on the income statement or net assets. Above an undiscounted value of €31 million, any increases in the award amount received by Rockhopper would result in a net benefit to the Group. The impact of changes to the value of the award is detailed below in sensitivity 2. To provide some context, under the Tranche 3 proceeds mechanics, had an amount been received on the 31 December 2025 equivalent to the original Award plus accrued interest this would have increased the net asset position by $21.1 million.
Sensitivity 1: Impact of discounting
Impact of increasing the time to recover the award by one year on net assets: decrease in net asset position $13 thousand
Impact of decreasing the time to recover the award by one year on net assets: increase net asset position $16 thousand
Sensitivity 2: Impact of fair value of Award
Impact on net assets in the event no award is received by Rockhopper: $0.5 million
Impact on net assets of decreasing the fair value of the award received by Rockhopper by 5%: $0.5 million
Impact on net assets of increasing the fair value of the award received by Rockhopper by 5%: $3.2 million
|
11. Finance income and expense |
|
|
2025 $'000 |
2024 $'000 |
|
Unwinding of discounts on fair value of Monetisation Agreement (see note 10) |
|
|
1,192 |
1,323 |
|
Bank and other interest receivable |
|
|
894 |
604 |
|
Total finance income |
|
|
2,086 |
1,927 |
|
|
|
|
|
|
|
Unwinding of discount on decommissioning provisions (see note 21) |
|
|
83 |
91 |
|
Co-venture loan interest |
|
|
2,173 |
203 |
|
Other |
|
|
98 |
2 |
|
Total finance expense |
|
|
2,354 |
296 |
|
12. Taxation |
2025 $'000 |
2024 $'000 |
|
Current tax: |
|
|
|
UK tax |
1,012 |
|
|
Overseas tax |
- |
1,840 |
|
Adjustment in respect of prior years |
1,902 |
22,300 |
|
Total current tax charge |
2,914 |
24,140 |
|
Deferred tax: |
|
|
|
Overseas tax |
(6,739) |
6,281 |
|
Total deferred tax (credit)/charge - note 22 |
(6,739) |
6,281 |
|
Tax on (loss)/profit on ordinary activities |
(3,825) |
30,421 |
The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax applied to profits for the year are as follows:
|
(Loss)/profit on ordinary activities before tax |
(42,004) |
76,780 |
|
(Loss)/profit on ordinary activities multiplied at 24% (31 December 2024: 26%) |
(10,091) |
19,963 |
|
Effects of: |
|
|
|
Income and gains not subject to taxation |
- |
(15,750) |
|
Expenditure not deductible for taxation |
11,559 |
127 |
|
Losses utilised |
- |
(3,120) |
|
Adjustments in respect of prior years |
1,902 |
22,300 |
|
Deferred taxes (credit)/charge on temporary differences |
(6,739) |
6,421 |
|
Other (including changes to, and differences in, tax rates) |
(456) |
480 |
|
Current tax (credit)/charge for the year |
(3,825) |
30,421 |
The total carried forward losses and carried forward pre trading expenditures in the Falkland Islands potentially available for relief are as follows:
|
|
2025 $'000 |
2024 $'000 |
|
UK |
71,405 |
85,631 |
|
Falkland Islands |
638,034 |
640,979 |
|
Italy |
52,077 |
42,568 |
Deferred tax assets are only recognised on losses carried forward to the extent it is deemed probable that they will be utilised in the future. No deferred tax asset has been recognised in respect of temporary differences arising on losses carried forward, outstanding share options or depreciation in excess of capital allowances where there is uncertainty in the timing of profits and hence future utilisation. Losses carried forward in the Falkland Islands includes amounts held within entities where utilisation of the losses in the future may not be possible. For the entity that holds the Sea Lion licences the total carried forward pre trading expenditures form the tax basis in the capitalised asset. Because this is lower than the carrying amount, it gives rise to a deferred tax liability (note 22) available for relief on commencement of trade.
13. Discontinued operations
In October 2024, the Group announced the disposal, subject to conditions precedent, of its 100% interest in Rockhopper Civita Limited which holds the Group's remaining operations in the Greater Mediterranean geographical segment ("the disposal group"). The transaction had not completed at the year end, but the assets and associated liabilities continue to be classified as held for sale on the balance sheet. Under the terms of the transaction Rockhopper Civita Limited must have €5.5 million in cash and cash equivalents on transfer. The US$ 8,161 thousand of term deposits and cash and cash equivalents disclosed below is equivalent to €6,951 thousand. Whilst currently held in accounts in the name of Rockhopper Civita Limited immediately prior to any transaction completion the Group would transfer any excess cash funds over and above the agreed €5.5 million out of the entity.
Due to the fact that the disposal group has been classified as held for sale and represents a geographical area of operations it has also been treated as a discontinued operation in line with IFRS 5.
The results of the discontinued operations, which have been included in the profit for the year, are the same as the Greater Mediterranean segment as disclosed in Note 3.
Completion of the disposal of the Group's Italian operations remains subject to regulatory approval from the Italian regulator. The Group continues to engage with the regulator and has provided further information as required. To allow sufficient time for the approval process to conclude, it was agreed by both parties to extend the long‑stop date in the SPA to 30 June 2026.
Cash flows from discontinued operations
|
|
2025 $'000 |
2024 $'000 |
|
Net cash from operating activities |
111 |
(312) |
|
Net cash from investing activities |
(225) |
(88) |
|
Net cash from financing activities |
- |
- |
The costs of disposal of Rockhopper Civita Limited are expected to be substantially less than the carrying amount of the related net liabilities and accordingly no impairment losses have been recognised on the classification of these operations as held for sale. The major classes of assets and liabilities comprising the operations classified as held for sale are as follows:
|
|
2025 |
2024 |
|
|
$'000 |
$'000 |
|
Exploration and evaluation assets |
666 |
441 |
|
Other receivables |
778 |
745 |
|
Term deposits |
6,340 |
- |
|
Cash and cash equivalents |
1,821 |
17 |
|
Assets classified as held for sale |
9,605 |
1,203 |
|
|
|
|
|
Other payables |
1,836 |
1,692 |
|
Provisions |
15,605 |
12,587 |
|
Liabilities associated with assets held for sale |
17,441 |
14,279 |
|
14. Basic and diluted (loss)/profit per share |
2025 Number |
2024 Number |
|
Weighted average number of Ordinary Shares |
648,238,819 |
644,879,070 |
|
Weighted average of shares held in Employee Benefit Trust |
(2,505,093) |
(1,304,500) |
|
Weighted average number of Ordinary Shares for the purposes of basic earnings per share |
645,733,726 |
643,574,570 |
|
Effects of Share options and warrants |
13,801,401 |
10,498,279 |
|
Weighted average number of Ordinary Shares for the purposes of diluted earnings per share |
659,535,127 |
654,072,849 |
|
|
Continuing operations |
Discontinued operations |
Total |
Continuing operations |
Discontinued operations |
Total |
|
|
2025 |
2025 |
2025 |
2024 |
2024 |
2024 |
|
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
Net (loss)/profit after tax for purposes of basic and diluted earnings per share |
(38,179) |
(1,502) |
(39,681) |
46,359 |
1,253 |
47,612 |
The weighted average number of Ordinary Shares takes into account those shares which are treated as own shares held in trust. As at the year end the Group had 2,505,093 Ordinary shares held in an Employee Benefit Trust (2024: 1,304,500) which have been purchased to settle future exercises of options.
3.0 million options (2024: 4.5 million) have not been included in the calculation of diluted EPS because their exercise is contingent on the satisfaction of certain criteria that had not all been met at 31 December 2025. The total number of options in issue is disclosed in note 8.
As the Group is reporting a loss in the current year then in accordance with IAS33 the share options are not considered dilutive because the exercise of the share options would have the effect of reducing the loss per share.
|
15. Exploration and evaluation assets |
|
||
|
|
Falkland Islands |
Greater Mediterranean |
Total |
|
|
$'000 |
$'000 |
$'000 |
|
At 31 December 2023 |
256,847 |
381 |
257,228 |
|
Additions |
14,656 |
78 |
14,734 |
|
Written off exploration costs |
(393) |
- |
(393) |
|
Foreign exchange movement |
- |
(18) |
(18) |
|
Reclassified to assets held for sale |
- |
(441) |
(441) |
|
At 31 December 2024 |
271,110 |
- |
271,110 |
|
Additions |
58,382 |
- |
58,382 |
|
Written off exploration costs |
(254) |
- |
(254) |
|
Foreign exchange movement |
- |
- |
- |
|
Reclassification to tangible fixed assets (development and production assets) |
(329,238) |
- |
(329,238) |
|
At 31 December 2025 |
- |
- |
- |
Falkland Islands Licences
The amounts for intangible exploration and evaluation assets represent active exploration and evaluation projects. The additions during the year of US$58.1 (2024 $14.7) million relate to the Sea Lion development.
Reclassification of Sea Lion E&E Asset to Tangible Fixed Assets
During the year ended 31 December 2025, the Company reclassified the carrying value of its Exploration and Evaluation assets in respect of the Sea Lion oil field, located in the North Falkland Basin, to tangible fixed assets (property, plant and equipment). The reclassification was effected on 31 December 2025 at a carrying value of $329.2 million (2024: $nil), being the date that commercially viability was obtained through the successful placement.
The reclassification reflects Management's conclusion that, as at 31 December 2025, the technical feasibility and commercial viability of extracting the mineral resource from the Sea Lion field are demonstrable. In reaching this conclusion, Management had regard to the following key milestones, each of which was achieved during the period leading up to and including 31 December 2025:
• Independent Competent Person's Report (CPR) - Proved Reserves;
• Approval of Field Development Plan by the Falkland Islands Government:
• Final Investment Decision (FID):
• Securing of Debt Financing:
• Securing of Equity Financing - Parent Company Placing
Basis for Selection of Reclassification Date
Management determined that 31 December 2025 is the appropriate date of reclassification, being the earliest date on which all criteria required to demonstrate technical feasibility and commercial viability were simultaneously satisfied. Whilst a number of the above milestones were achieved prior to 31 December 2025, Management concluded that commercial viability was not fully demonstrable until the Company's equity funding requirement had been met in full. The receipt of Placing proceeds by the parent company on 31 December 2025 represented the final element of the funding structure and removed the residual funding risk that had, in Management's judgement, previously prevented commercial viability from being regarded as demonstrable in its entirety.
Impairment Assessment
In accordance with IFRS 6, Management performed an impairment assessment of the Sea Lion E&E assets immediately prior to reclassification. No impairment loss was identified prior to reclassification - further details of the impairment assessment are set out in Note 16 -Property, plant and equipment. As a result, the full carrying value of the E&E assets of $329.2 million was transferred to tangible fixed assets as at 31 December 2025. Written off exploration costs during the year US$254 thousand (2024: US$ 393 thousand) relate to costs associated with the licences to the south of those included in the current Field Development plan. In 2020, costs of US$222.5 million were written off in respect of these licences as they did not have a committed capital plan. Given there is still no committed capital investment plan Management does not consider there to be an indication of impairment reversal.
.
|
16. Property, plant and equipment |
|
||
|
|
Development and production assets |
Other assets |
Total |
|
|
$'000 |
$'000 |
$'000 |
|
Cost |
|
|
|
|
At 1 January 2025 |
- |
157 |
157 |
|
Additions |
- |
- |
- |
|
Reclassification from intangible fixed assets |
329,238 |
- |
329,238 |
|
At 31 December 2025 |
329,238 |
157 |
329,395 |
|
Depreciation and impairment |
|
|
|
|
At 1 January 2025 |
- |
(147) |
(147) |
|
Depreciation charge in the year |
- |
(8) |
(8) |
|
At 31 December 2025 |
- |
(155) |
(155) |
|
Carrying value |
|
|
|
|
At 31 December 2025 |
329,238 |
2 |
329,240 |
|
At 31 December 2024 |
- |
10 |
10 |
Sea Lion Development Asset
The Sea Lion development asset of $329.2 million (2024: $nil) represents the carrying value of E&E assets reclassified from exploration and evaluation assets during the year ended 31 December 2025 (see Note 15 - Exploration and Evaluation Assets). The asset comprises all exploration, appraisal, and pre-development expenditure capitalised in relation to the Sea Lion field since the date of discovery.
The Sea Lion development asset is not yet subject to depreciation as the field had not commenced production as at 31 December 2025. Depreciation will be charged on a unit-of-production basis, calculated by reference to the ratio of production in the period to the estimated total Proved Developed Reserves of the field, commencing from the date of first production
Impairment Review
Management performed an impairment assessment of the Sea Lion development asset as at 31 December 2025 in accordance with IAS 36 - Impairment of Assets. The Sea Lion CGU, comprising RKH's 35% working interest in the Sea Lion development project located in licences PL032 in the North Falkland Basin, is required to be assessed for impairment prior to reclassification from intangible E&E assets to tangible D&P assets following the Final Investment Decision taken in December 2025. The recoverable amount was determined on a Value In Use (VIU) basis, using a discounted cash flow approach in line with how market participants would value the asset (and corresponding to how the Group would value similar assets), with the estimate therefore being classified as Level 3 in the fair value hierarchy due to a number of unobservable inputs used in the estimate. Costs of disposal were considered to be immaterial for the purposes of the impairment test. The key assumptions used in the valuation were as follows:
For oil price, RKH has used a long-term flat Brent oil price based on market consensus, adjusted for a fixed quality differential. Production are based on the independent reserves assessment conducted by NSAI, with volumes reflecting the 2C resource for the North Development Area Phase 1. Cost estimates were consistent with those used in the Senior debt banking model. The pre-tax discount rate applied is 8.08% (WACC). Sensitivity analysis has been performed on four scenarios: (i) a 10% reduction in oil price; (ii) reducing production to 90% of the 2C estimate; (iii) increasing the discount rate by 1%; and (iv) a 10% increase in capital expenditure. In none of those cases does an impairment arise.
|
17. Other receivables |
2025 $'000 |
2024 $'000 |
|
Current |
|
|
|
Receivables |
460 |
193 |
|
Prepayments |
18,026 |
3,906 |
|
Other |
223 |
58,231 |
|
|
18,709 |
62,330 |
|
As at 31 December 2025 prepayments relate to prepaid costs including prepaid capital expenditure and loan arrangement fees relating to a senior debt facility entered into subsequent to year end. Financing fees related to the facility will be capitalized and amortised over the term of the debt facility. As at 31 December 2024 other receivables included US$58,228 thousand in relation to the fair value of the monetisation agreement, in the current year this has been presented as a Non current asset due to the expected timing of realization following annulment of the original award during 2025 (note 10).
|
||
|
18. Term deposits |
2025 $'000 |
2024 $'000 |
|
Maturing after the period end |
|
|
|
Within three months |
13,429 |
19,969 |
|
|
13,429 |
19,969 |
Term deposits relate to amounts placed on fixed term deposit with various A rated deposit banks.
|
19. Other payables and accruals |
|
|
|
Current liabilities |
2025 $'000 |
2024 $'000 |
|
Accounts payable |
102 |
225 |
|
Accruals |
48,138 |
6,289 |
|
Other creditors |
556 |
2 |
|
|
48,796 |
6,516 |
All amounts are expected to be settled within twelve months of the balance sheet date and so the book values and fair values are considered to be the same. Accruals include $38.8 million (2024: $4.7 million) amounts owed to Navitas in relation to Sea Lion. These amounts are expected to be invoiced and then either settled 100% using the pre-FID loan facility or 2/3 to the post-FID loan facility as appropriate.
|
Non current liabilities |
2025 $'000 |
2024 $'000 |
|
Other payables |
21,645 |
- |
|
Co-venturers loan |
52,493 |
15,354 |
|
|
74,138 |
15,354 |
Other payables amounts reflect the recognition of the potential insurance proceeds repayment resulting from any future receipts under the Monetisation Agreement in the year (note 10).
The movement on Co-venturers loan can be analysed as follows:
|
|
$'000 |
|
Opening balance |
15,354 |
|
Proceeds from loans (cash) |
9,135 |
|
Proceeds from loans (non-cash) |
25,831 |
|
Accrued interest (non-cash) |
2,173 |
|
|
52,493 |
|
20. Tax payable |
2025 $'000 |
2024 $'000 |
|
Current tax payable |
1,012 |
1,806 |
|
Non current tax payable |
20,873 |
22,300 |
|
Total tax payable |
21,885 |
24,106 |
On 9 December 2025, the Company and the Falkland Islands Government ('FIG') entered into a final settlement agreement (the 'Settlement Deed') in respect of an uncertain tax liability. The uncertainty arose from capital gains taxes assessed by FIG on the farm-out of interests in the Sea Lion field to Premier Oil plc in 2012 (the '2012 Farm-Out').
The Settlement Deed also operates to settle any tax liability arising in connection with the farm-out to Navitas Petroleum in 2022 (the '2022 Farm-Out').
Payment Terms
The Settlement Deed provides for the Company to pay FIG a total of GBP 30 million on an undiscounted basis, payable in instalments as follows:
|
Instalment |
Amount (GBP) |
Timing / Condition |
|
1 |
GBP 1 million |
At signing of the final settlement agreement (paid December 2025) |
|
2 |
GBP 2 million |
At Phase 1 sanction / Financial Close (paid December 2025) |
|
3 |
GBP 1 million |
30 calendar days from First Oil (the 'Payment Date') |
|
4 |
GBP 2 million |
First anniversary of the Payment Date |
|
5 |
GBP 3 million |
Second anniversary of the Payment Date |
|
6 |
GBP 7 million |
Third anniversary of the Payment Date |
|
7 |
GBP 7 million |
Fourth anniversary of the Payment Date |
|
8 |
GBP 7 million |
Fifth anniversary of the Payment Date |
|
Total |
GBP 30 million |
(undiscounted) |
The Settlement Deed contains the following provisions in respect of the timing of payments:
- Early payment: the Company is entitled to settle any instalment before its contractual due date, attracting a discount of 10% per annum calculated on the amount settled early.
- Late payment: interest accrues on any overdue instalment at a rate of 10% per annum from the contractual due date until the date of actual payment.
(a) Measurement - Discounting of Financial Liability
First Oil from the Sea Lion Phase 1 development is expected in the first half of 2028, as such the liability has been discounted.
The discount rate applied is 10% per annum, being the rate inherent in the Settlement Deed at which the Company may prepay instalments.
Applying a discount rate of 10% per annum to the scheduled instalment cash flows, the present value of the remaining liability as at 31 December 2025 is GBP 15.5 million. Translated at the closing exchange rate at 31 December 2025, the carrying value of the tax settlement creditor is $20.9 million.
(b) Adjustment in Respect of Prior Periods
The carrying value of the tax creditor recognised at 31 December 2024 was $22.3 million. Following the execution of the Settlement Deed and revision of the payment profile and applicable discount rate, the carrying value has been remeasured to US$20.9 million. The resulting credit of US$1.4 million is recognised as an adjustment in respect of prior periods within the current tax charge for the year ended 31 December 2025. This has been offset by the initial payments paid during the year of equivalent to US$4.0 million leading to a net current year tax charge of US$2.5 million.
(c) Balance Sheet Classification
The remaining tax settlement liability of $20.9 million is classified in full as a non-current liability at 31 December 2025. No instalments under the Settlement Deed are contractually due until 30 calendar days after First Oil, which is not expected until 2028. As no amounts fall due within 12 months of the balance sheet date, the entire carrying value is presented within non-current liabilities.
Key Assumptions and Sensitivities
The principal assumption underlying the present value calculation is the expected First Oil date. A change in the expected timing of First Oil would affect the payment dates of instalments 3 to 8 and, consequently, the present value of the liability.
The 10% per annum discount rate is considered appropriate as it is the rate inherent in the Settlement Deed. Changes in prevailing market rates would not affect the measurement of the liability as the effective interest rate is fixed at inception.
|
21. Provisions |
Decommissioning |
|
|
|
|
provision $'000
|
2025 $'000 |
2024 $'000 |
|
Brought forward |
1,600 |
1,600 |
19,132 |
|
Changes in estimate |
457 |
457 |
(5,400) |
|
Amounts arising in the year |
- |
- |
3 |
|
Unwinding of discount |
83 |
83 |
392 |
|
Foreign exchange |
- |
- |
60 |
|
Reclassified to liabilities held for sale |
- |
- |
(12,587) |
|
Carried forward at year end |
2,140 |
2,140 |
1,600 |
The decommissioning provision relates to the Company's temporary dock facility in the Falkland Islands.
Judgements are made based on the long term economic environment around appropriate inflation and discount rates to be applied as well as the timing of any future decommissioning. In the Falkland Islands costs are most likely to be in $US or GB£. Management consider the UK economic environment is best when informing these judgements due to probable contractor base likely to be used.
The Company believe it appropriate to use the following inflation and discount rates;
|
|
2025 |
2024 |
|
Inflation |
2.0% |
1.6% |
|
Discount |
4.9% |
5.2% |
|
Period (years) |
28 |
30 |
The changes in estimate in the year all relate to the change in relative discount and inflation rates.
Decommissioning costs are uncertain and management's cost estimates can vary in response to many factors, including changes to the relevant legal requirements, the emergence of new technology or experience at other assets. The expected timing, work scope and amount of expenditure may also change. Therefore, significant estimates and assumptions are made in determining the costs associated with the provision for decommissioning. The estimated decommissioning costs are reviewed annually, and the results of the most recent available review used as a basis for the amounts in the Consolidated Financial Statements. Provision for environmental clean-up and remediation costs is based on current legal and contractual requirements, technology and price levels. However, actual decommissioning costs will ultimately depend upon future market prices for the necessary decommissioning works required which will reflect market conditions at the relevant time.
The estimated costs associated with the decommissioning works are those that are likely to have a material impact on the provision. Given the facilities in the Falkland Islands are to be utilised during the Sea Lion development any changes in the provision would have been capitalised in the intangible asset. A 10% increase in these estimates would increase both the provision and the tangible assets in the year by US$214,000. Similarly, a 10 per cent reduction in these estimated costs would decrease both the provision and the intangible assets in the year by US$214,000.
|
22. Deferred tax |
|
|
|
|
|||||
|
The following are the major deferred tax liabilities and assets recognised by the group and movements thereon during the current and prior reporting period. |
|
||||||||
|
|
Accelerated tax depreciation |
Revaluation of financial assets |
Tax losses |
Total |
|
||||
|
|
$'000 |
$'000 |
$'000 |
$'000 |
|
||||
|
At 1 January 2024 |
(39,137) |
(16,779) |
10,611 |
(45,305) |
|
||||
|
Foreign exchange |
- |
(1,553) |
982 |
(571) |
|
||||
|
Movement in period |
- |
18,332 |
(11,593) |
6,739 |
|
||||
|
At 31 December 2025 |
(39,137) |
- |
- |
(39,137) |
|
||||
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the group intends to settle its current tax assets and liabilities on a net basis.
Total carried forward losses and carried forward pre-trading expenditures available for relief on commencement of trade at 31 December 2025 are disclosed in note 12 Taxation. Deferred tax assets are only recognised in relation to these losses to the extent it is probable that future suitable taxable profits will be available against which these losses can be utilised.
23. Share capital
|
|
2025 |
2024 |
||
|
|
$'000 |
Number |
$'000 |
Number |
|
Authorised, called up, issued and fully paid: Ordinary shares of £0.01 each |
12,209 |
847,316,741 |
9,455 |
640,578,764 |
|
|
|
|
2025 Number |
2024 Number |
|
Shares in issue brought forward |
|
|
640,578,764 |
620,229,436 |
|
Shares issued |
|
|
|
|
|
- Issued on placing |
|
|
201,102,976 |
- |
|
- Issued on exercise of warrants and share options |
|
|
2,250,000 |
20,349,328 |
|
- Issued to EBT |
|
|
3,385,001 |
- |
|
Shares in issue carried forward |
|
|
847,316,741 |
640,578,764 |
The shares issued to the EBT were to ensure that the EBT had sufficient shares to issue to the holders of the nil cost LTIP options.
During the year Rockhopper raised funds by way of a Placing and Subscription, in each case at an issue price of 53 pence per Unit (the "Issue Price"). Each Unit offered comprises one New Ordinary Share and, for every four New Ordinary Shares subscribed for, one Warrant. Each Warrant gives the holder the right to subscribe for one new Ordinary Share at a price of 80 pence per Ordinary Share (the "Strike Price").
The Placing utilised a cashbox structure and therefore the premium on the ordinary shares and associated costs have in accordance with section 612 of the Companies Act 2006 been recognised within the merger reserve. In relation to the shares, $129.6m was raised of which $2.6m is classified as Share Capital with the remaining balance in the Merger Reserve. The Warrants issued totaled $12.5m and were recognised in Share options and warrants reserve. The above are net of costs of $6.7m.
24. Reserves
Set out below is a description of each of the reserves of the Group:
|
Share premium |
Amount subscribed for share capital in excess of its nominal value. |
|
Share options and warrants |
The share incentive plan reserve captures the equity related element of the expenses recognised for the issue of options, comprising the cumulative charge to the income statement for IFRS2 charges for share based payments less amounts released to retained earnings upon the exercise of options. It also includes the value of warrants that have been classified as Equity. |
|
Own shares held in trust |
Shares held in trust by the Employee Benefit Trust which have been purchased to settle future exercises of options. |
|
Merger reserve |
The difference between the nominal value and the fair value of shares issued on acquisition of subsidiaries. |
|
Foreign currency translation reserve |
Exchange differences arising on consolidating the assets and liabilities of the Group's subsidiaries are classified as equity and transferred to the Group's translation reserve. |
|
Special reserve |
The reserve is non distributable and was created following cancellation of the share premium account on 4 July 2013. It can be used to reduce the amount of losses incurred by the Parent Company or distributed or used to acquire the share capital of the Company subject to settling all contingent and actual liabilities as at 4 July 2013. Should not all of the contingent and actual liabilities be settled, prior to distribution the Parent Company must either gain permission from the actual or contingent creditors for distribution or set aside in escrow an amount equal to the unsettled actual or contingent liability. |
|
Retained losses |
Cumulative net gains and losses recognised in the financial statements.
|
25. Capital commitments
As part of taking Final Investment Decision on Sea Lion Phase 1 the Group approved a multi-year work programme and budget. As at 31 December 2025 capital commitments under that budget totaled US$579 million. Part of these costs are to be funded through the Post-FID Loan arrangements with Navitas. Under these arrangements Navitas fund 2/3 of the Group's share of post sanction Sea Lion Phase 1 capital costs to the extent they are not covered by the Senior Debt Facility.
In the prior year significant capital expenditure for at the end of the reporting period but not recognised as liabilities were US$0.6 million relating to the Company's intangible exploration and evaluation assets.
26. Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed. Subsidiaries are listed in notes of the Company financial statements.
The remuneration of directors, who are the key management personnel of the Group, is set out below in aggregate. Further information about the remuneration of individual directors, including deferred salary and bonus amounts, is provided in the Directors' Remuneration Report on pages 41 to 50.
|
|
Year ended 31 December |
Year ended 31 December |
|
2025 $'000
|
2024 $'000
|
|
|
Short term employee benefits |
2,061 |
918 |
|
Share based payments |
50 |
48 |
|
|
2,111 |
966 |
Alison Baker, Senior Independent Director, sold a total of 50,000 ordinary shares of £0.01 each in the Company ("Shares"). The sale of Shares completed on 4 June 2025. Alison Baker retains 234,181 Shares in the Company, representing of the 0.036% of the issued share capital of the Company.
27. Financial instruments - Fair values and risk management
A. Accounting classifications and fair values
The only assets classified at fair value through profit and loss is the Agreement as disclosed in note 10 Other income and expenses. The only liabilities classified as at fair value through profit and loss is the Insurance Liability as disclosed in note 10 Other income and expenses.
B. Measurement of fair values
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are recognised and measured at fair value in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the group has classified its financial instruments into the three levels prescribed under the accounting standards. An explanation of each level follows underneath.
|
Financial asset/liability |
Level |
Valuation technique/key inputs |
Significant unobservable input(s) |
Relationship and sensitivity of unobservable inputs |
|
Monetisation Agreement and Insurance Liability (Note 10) |
3 |
Most likely outcome, discounted cash flow Future cash flows based on expected award value, costs to recover and time to recovery. These were then discounted at market observable rates. |
Timing of cash flows, outcome of arbitration. |
Sensitivity analysis is provided in the note |
C. Financial risk management
The Group has exposure to the following risks arising from financial instruments:
· Market risk see Note 27 C i
· Credit risk see Note 27 C ii
· Liquidity risk see Note 27 C iii
· Capital risk see Note 27 C iv
i. Market rate risk
Foreign exchange risks: The Group is exposed to foreign exchange movements on monetary assets and liabilities denominated in currencies other than US$. A number of the Group's subsidiaries have a functional currency other than US$, where this is the case the Group has an exposure to foreign exchange differences with differences being taken to reserves.
The Group has cash and cash equivalents and term deposits of US$201.4 million of which US$144.2 million was held in US$ denominations. The Group has expenditure in GB£ and Euro and accepts that to the extent current cash balances in those currencies are not sufficient to meet those expenditures they will need to acquire them. The following table summarises the split of the Group's assets and liabilities by currency:
|
Currency denomination of balance |
$ $'000 |
£ $'000 |
€ $'000 |
|
Assets |
|
|
|
|
31 December 2025 |
498,212 |
19,165 |
33,372 |
|
31 December 2024 |
275,536 |
4,575 |
75,426 |
|
Liabilities |
|
|
|
|
31 December 2025 |
135,491 |
28,624 |
39,421 |
|
31 December 2024 |
60,815 |
23,932 |
22,413 |
The following table summarises the impact on the Group's pre-tax (loss)/profit and equity of a reasonably possible change in the US$ to GB£ exchange rate and the US$ to euro exchange:
|
|
Pre tax (loss)/profit |
Total equity |
||
|
+10% US$ rate |
-10% US$ rate |
+10% US$ rate |
-10% US$ rate |
|
|
increase |
decrease |
increase |
decrease |
|
|
$'000 |
$'000 |
$'000 |
$'000 |
|
|
US$ against GB£ |
|
|
|
|
|
31 December 2025 |
(945) |
945 |
(945) |
945 |
|
31 December 2024 |
(194) |
194 |
(194) |
194 |
|
|
|
|
|
|
|
US$ against euro |
|
|
|
|
|
31 December 2025 |
(604) |
604 |
(604) |
604 |
|
31 December 2024 |
5,301 |
(5,301) |
5,301 |
(5,301) |
Interest rate risks: the Group's only external debt is the Pre and Post-FID loan from Navitas. It is at a fixed rate of interest and the Group does not account for this at FVTPL so a change in interest rate at the reporting date would not affect profit or loss. Therefore exposure to interest rates is limited to finance income it receives on cash and term deposits. The Group is not dependent on its finance income and given the current interest rates the risk is not considered to be material.
ii. Credit risk
The Group recharges partners and third parties for the provision of services. Should the companies holding these accounts become insolvent then these funds may be lost or delayed in their release. The amounts classified as receivables as at the 31 December 2025 $459,000 (31 December 2024: $193,000).
Other receivables relates to the fair value of the Agreement to monetise the Group's Award. The counter party to the Agreement is a specialist fund with significant funds under management.
Credit risk relating to the Group's other financial assets which comprise principally cash and cash equivalents and term deposits arises from the potential default of counterparties. Investments of cash and deposits are made within credit limits assigned to each counterparty. The risk of loss through counterparty failure is therefore mitigated by the Group splitting its funds across a number of banks.
iii. Liquidity risk
The Group monitors the liquidity position by preparing cash flow forecasts to ensure sufficient funds are available. Further information can be found in the going concern assessment contained in Note 1.5.
Maturity of financial liabilities
The table below analyses the Group's financial liabilities, which will be settled on a gross basis, into relevant maturity groups based on the remaining period at the balance sheet to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. The Co-venturers loan balance of $52,493,000 (2024: $15,354,000) included in non-current payables has been excluded from the analysis as its repayment is to be made from the Sea Lion development. Whilst it is expected that the project will be continue in the future there is no guarantee on timing so the date of any repayment is yet to be determined.
|
|
Within 1 year |
2 to 5 years |
More than 5 years |
Total contractual cashflows |
Carrying amount |
|
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
Other payables |
48,796 |
- |
- |
48,796 |
48,796 |
|
At 31 December 2025 |
48,796 |
- |
- |
48,796 |
48,796 |
|
|
Within 1 year |
2 to 5 years |
More than 5 years |
Total contractual cashflows |
Carrying amount |
|
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
Other payables |
6,516 |
- |
- |
6,516 |
6,516 |
|
At 31 December 2024 |
6,516 |
- |
- |
6,516 |
6,516 |
iv. Capital risk
The Group manages capital to ensure that it is able to continue as a going concern whilst maximising the return to shareholders. The capital structure consists of cash and cash equivalents and equity. The board regularly monitors the future capital requirements of the Group, particularly in respect of its ongoing development programme. Further information can be found in the going concern assessment contained in Note 1.5.
28. Events after the reporting period end
Subsequent to the reporting date, the Company completed an Open Offer to Qualifying Shareholders, as announced on 22 December 2025. The Open Offer closed for acceptances at 11.00 a.m. on 15 January 2026.
Valid acceptances were received for 101,956,821 Open Offer Shares, representing a take‑up of approximately 773.1% of the 13,188,036 Open Offer Shares available. Qualifying Shareholders received their full basic entitlement, with excess applications scaled back on a pro rata basis in accordance with the terms of the Open Offer.
The Open Offer raised gross proceeds of approximately £6.9 million (approximately US$9.2 million) through the issue of 13,188,036 new ordinary shares of 1 pence each. Admission of the Open Offer Shares to trading on AIM occurred on 21 January 2026, at which date the Company's issued ordinary share capital comprised 860,504,777 ordinary shares.
On the 20 May Navitas Petroleum LP ("Navitas" or the "Operator") provided an update on Sea Lion development progress. Phase 1 remains on track for first oil in H1 2028, with drilling scheduled to commence early 2027. The Aoka Mizu FPSO (55k bopd gross; 19.25k bopd net to Rockhopper) will sail to its upgrade shipyard by end of May, following conclusion of operations by its current operator. Upgrade works have been relocated from the Middle East to Asia due to the Iran conflict, adding c.US$45m to the development budget; Rockhopper's net additional equity cost is c.US$5.25m, and the Company remains fully funded for Phase 1.
Separately, Navitas has signed an MOU for an additional FPSO targeting acceleration of subsequent phases, which could add a further 125k bopd gross (43.75k bopd net to Rockhopper) of production capacity. No binding agreements are in place.
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