In the financial year ending 31 Dec 2016, Rockhopper reported profit after tax of $98 million, compared to $11 million the previous year.
David McManus, Chairman of Rockhopper, commented: “Last year, Rockhopper delivered on a number of operational, corporate and strategic objectives – completing a highly successful exploration campaign in the Falklands, progressing our flag-ship Sea Lion development into FEED, whilst at the same time adding material incremental production in the Greater Mediterranean.
“As the technical engineering phase of the Sea Lion FEED approaches conclusion, focus will shift in 2017 to the commercial, fiscal and financing elements of the project.
“With the spot price for Brent crude fluctuating around $55 per barrel in early 2017, and the cost efficiencies realised through the FEED process, economics of the Sea Lion project are sufficiently robust to be sanctioned in the current environment.
“The Sea Lion development (illustrated above, in yellow) has been enhanced with further cost reductions achieved; Sea Lion life of field costs are estimated at $35-barrel with project break-even” at $45-barrel.
“We have submitted our updated Sea Lion Field Development Plan and draft Environmental Impact Statement to the Falkland Islands Government, while the independent resource audit has confirmed reserves of 517 mmbbl (2C) and 900 mmbbl (3C) oil resources (gross), and near-field, low-risk exploration upside of 207 mmbbl (gross, mid case, unrisked).
“In the Falklands, we have grown our resource position substantially through exploration and acquisition, completing the merger with Falkland Oil & Gas Limited.
“We believe the combination of Rockhopper and FOGL will create significant value for shareholders, not only by positioning Rockhopper as the largest acreage holder in the North Falkland Basin, but our enhanced interests provide us with a stronger strategic position in the future commercialisation of our world-class Sea Lion project.”
|$m||FY 2016||FY 2015||9 months 2014|
|Economic production4 (boepd)||1,350||322||272|
|Profit after tax||98||11||(8)|
|Cash out flow from operating activities||(21)||(7)||(11)|
The profit after tax in the year arose primarily due to the excess of fair value over consideration associated with the acquisition of FOGL. Excluding the impact of the excess fair value over consideration associated with the FOGL acquisition would have resulted in a loss after tax in the year of $14 million.