LONDON – The boards of Rockhopper and Falkland Oil and Gas Ltd. (FOGL) have reached agreement on an all-share merger of the two companies.
The resultant entity, they say, will be the largest offshore North Falkland Islands license and discovered resource holder, with enhanced prospects of progressing the Premier Oil-operated Sea Lion project through a final investment decision.
Following the successful Zebedee well drilled earlier this year, FOGL estimates that license PL004b contains 2C contingent resources of 256 MMbbl, which will likely be developed as part of the greater Sea Lion area program.
However, FOGL’s current financial position is not at present strong enough to accommodate this investment.
The company anticipates running up capex of $35 million for the second half of 2015 as a result of delays during drilling of the unsuccessful Humpback well, operated by Noble Energy southeast of the Falklands.
A further outstanding amount is owed to Noble related to Humpback cost over-runs. As of Oct. 31, 2015, FOGL had a cash balance of just $8.6 million, although it will receive $10 million compensation from Premier and Rockhopper for the cancelled well on the Jayne East structure in the current drilling campaign.
Share your news with Offshore at email@example.com