AIM-listed Rockhopper Exploration, the oil and gas company with key interests in the North Falkland Basin and the Greater Mediterranean region, has provided the following corporate update.
Economic production* from Egypt and Italy for the year ended 31 December 2016 expected to average approximately 1,350 boepd net to Rockhopper.
Group economic production:
Following completion of the acquisition of Beach Egypt in August, the Company’s net full year economic production* for 2016 is expected to average approximately 1,350 boepd with production from both the Guendalina and Civita fields in Italy marginally ahead of expectations.
Consistent with the recovery in oil prices, the Group’s average realised gas price in Italy has increased from approximately €0.12 per scm at the beginning of the year to approximately €0.18 per scm in November.
Abu Sennan, Egypt (RKH 22% working interest):
During the second half of 2016, both the Al Jahraa SE-1X exploration well and the ASH-1X ST2 development wells were brought onto production with additional zones in the wells to be brought into production at a later date.
A new development lease of c.30 square km was awarded around the Al Jahraa SE-1X well with EGPC attributing gross reserves of over 9 MMSTB to the development area.
Subject to Operating Committee approval, the Company expects two firm development wells to be drilled on the Al Jahraa field during the first half of 2017. These wells are aimed at maintaining production levels by offsetting natural decline from existing wells within the concession.
In addition, the Company imminently expects to receive final ratification for a 5-year extension to the Abu Sennan exploration licence. Once approved, the Company will undertake to participate in at least two exploration wells over the next 3 years at a commitment (net to Rockhopper’s 22% working interest) of approximately $1.3 million.
Sam Moody, CEO, commented:
‘This has been an important period for Rockhopper with progress made on a range of fronts. With costs on Sea Lion continuing to fall and our balance sheet strength still in place, we remain alert to opportunities to materially grow our Greater Mediterranean business in 2017.
Through 2016, as the Sea Lion FEED process has progressed, we have seen a material reduction in costs and significant improvements in the overall economics of the project. Life of field costs for Phase 1 of Sea Lion are now approximately $35 per barrel – highly attractive in the context of today’s oil price and we continue to actively explore all avenues to move the project toward sanction.
We have significantly increased production and cash flow in the Greater Mediterranean region and see further scope to materially grow that business in 2017.
Our balance sheet remains strong with expected year-end cash of approximately $80 million before the remaining North Falkland Basin exploration campaign close out costs.’
* Economic production includes production from the effective date (being 1 January 2016) of the acquisition of Beach Egypt.
(Rockhopper Exploration Press Release)