Source: Rockhopper Exploration
Rockhopper Exploration (AIM: RKH) reports that the recent successful flow test at Sea Lion validated the potential for commercial oil in the North Falkland basin and has significantly enhanced the prospects for the company.
Rockhopper is now preparing to progress its operational program, which will include appraising the Sea Lion discovery, shooting additional 3D seismic across the extent of the North Falkland Basin and drilling further exploration and appraisal wells on its Northern acreage. A number of highly attractive new targets have been determined.
Diamond Offshore, the owners and managers of the Ocean Guardian semisubmersible drilling unit, which is operating in the Falkland Islands and is currently engaged in the drilling campaign, has recently made a proposal to Rockhopper, at Rockhopper's request, for a continuation of the drilling campaign under a new rig contract consisting of a possible three firm wells and five options extension.
The execution of any such contract with Diamond Offshore would be subject both to the deposit by Rockhopper into an escrow account of significant funds sufficient to cover the day rate and other obligations and to agreement on a form of contract acceptable to both parties.
Furthermore, Rockhopper has entered into two letters of intent with a seismic contractor to acquire additional 3D seismic using two separate vessels. Rockhopper intends to enter into contracts to procure both vessels shortly and, if it does so, it expects that work will begin before the end of January 2011 to allow Rockhopper to better analyze the Sea Lion sandstone fans, as well as allowing more detailed and accurate mapping of additional exploration upside within the basin.