Spuds

22 Aug

Rockhopper Exploration has added another few pence to its share price today on an announcement that the AIM listed oil explorer has spudded a new well in the vicinity of its Sea Lion discovery off the Falkland Islands.

An official statement from the company says, ” Rockhopper Exploration plc (AIM: RKH), the North Falkland Basin oil and gas exploration company, announces that the 14/10-7 exploration well (the “Well”) was spudded at 0600hrs BST on 22 August 2011. The Well is situated on Licence PL032, which is 100% owned and operated by Rockhopper. The Well is located approximately 3.3km to the north west of the 14/10-2 discovery well, just outside of the Sea Lion Discovery Area. The Well is designed to investigate reservoir and hydrocarbon presence towards the northern limit of the currently mapped extent of the Sea Lion Main Complex within an area of relatively low amplitudes. Accordingly, the Sea Lion Main Complex will be the only target, with reservoir expected to be thinner than encountered in the 14/10-2 discovery well. Drilling operations are expected to take approximately 32 days and a further announcement will be made once drilling is completed.”

This is a further attempt to understand the geology present in the Falkland’s Basin and find the limits of the discovery made last year.

Earlier this week, the company revealed it now estimates that Sea Lion contains between 608 million and 1.279 billion barrels of in-place oil following the interpretation of ‘fast track’ 3D seismic data. The data also indicates that the Sea Lion main complex comprises ‘two fan lobes sourced from the same main feeder channel just to the east of the 14/10-5 and 14/10-2 wells’. It also shows that the complex extends to the south, and that the new ‘high case’ area extends over 90 square kilometres.

With this information in mind, Oriel Securities now value the share price at 1114p, way above the current 221p in today’s market.

 

 

 

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