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Rockhopper Exploration PLC

Rockhopper Exploration drills next Falklands oil well

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Rockhopper Exploration (LON:RKH) has spudded the latest exploration well in the offshore Falkland Islands frontier oil and gas play. So far the closely followed Falklands exploration story has been rather hit and miss, however out of the four companies drilling in the area, Rockhopper has enjoyed the most success to date.

This morning, Rockhopper announced the spudding of the Ernest 26/6-1 exploration well, on the PL024 licence in the North Falkland basin. The company has the entire interest in the Ernest prospect, and rig is expected to take 30 days to drill down to the 2,400m target depth. 

The wider Falklands play is made up of two separate basins, the North basin and the South basin. Rockhopper and Desire Petroleum (LON:DES) have been drilling their interests in the North basin, and Borders & Southern (LON:BOR) and Falkland Oil & Gas (LON:FOGL) have prospective interests in the South Basin.

The Earnest well is the fourth to be drilled across the area, and it is the third in the North basin.

Rockhopper's Sea Lion discovery has been the highlight of Falklands exploration story to date. The Sea Lion 14/10-2 struck oil early in May, and later in June further analysis showed that the well had discovered medium gravity oil.

The analysis confirmed the first contingent resource in the Falklands, and upped the recoverable resource estimates from 170mmbbls (million barrels) to 242mmbbls with “significant upside potential.”

Sea Lion’s gross oil column stretches over 217 metres with 53 metres of net pay. Rockhopper believes that the well has opened a fairway to licenses PL032 and PL033 and will now test the well “at the earliest opportunity” during the current campaign.

Once the Earnest well has been completed, the Ocean Guardian rig will return to the Sea Lion well to conduct flow testing.

Previously in March, the results for the Rockhopper-Desire JV Liz 14/19-1 exploration well, the first in the Falklands, disappointed. Whilst the primary Liz target was encountered with indications of hydrocarbons, subsequent logging operations confirmed that oil may be present in thin intervals but the reservoir quality was poor.

Last week, FOGL almost halved its share price when the first well in the South basin, Toroa F61/5-1, came up dry. The well was drilled to a depth of 2,476m but failed to unearth "any reservoired hydrocarbons".

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