Rockhopper, FOGL to merge in £57.1-million deal

The boards of Rockhopper Exploration PLC and Falkland Oil & Gas Ltd. (FOGL) reported reaching an agreement to merge in an all-share deal valued at £57.1 million. Once combined, the resulting company will be the largest license holder in the North Falkland Islands, the companies said.

After the merger, current Rockhopper shareholders will own about 65% of the combined group’s issued share capital, and FOGL shareholders will own about 35%.

Rockhopper, based in the UK with interests in the Falkland Islands, was established in 2004 with a strategy to invest in and undertake an offshore oil exploration program. Rockhopper holds 40% interests in production licenses PL032 and PL033 and, on completion of a farm-in announced in October 2013, 24% stakes in Blocks PL004a, PL004b, and PL004c. All of these blocks are operated by Premier Oil PLC. In addition, it has a 3% interest Block PL003, operated by Desire Petroleum PLC.

In spring of 2010, Rockhopper drilled an exploration well on the Sea Lion prospect that resulted in an oil discovery (OGJ Online, June 7, 2010). The Sea Lion discovery, which located an estimated 170-242 million bbl of recoverable medium-gravity crude oil, was hailed as “the first contingent oil resource in the Falklands.”

In July 2012, Rockhopper entered into a farmout deal with Premier Oil whereby Premier acquired 60% of Rockhopper’s interests in its North Falkland basin licenses in exchange for $231 million, a contribution of $722 million to Rockhopper’s share of Sea Lion development costs, and a net exploration carry of as much as $48 million (OGJ Online, July 12, 2012).

In August 2014, Rockhopper completed the takeover of Mediterranean Oil & Gas PLC through which it now holds a portfolio of production, development, appraisal, and exploration interests in Italy, Malta, and France.

Also after the merger is completed, the existing Rockhopper management team will remain the same with Tim Bushell, chief executive officer of FOGL, and John Martin, chairman of FOGL, joining the board of Rockhopper as nonexecutive directors.

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