Rockhopper Exploration

ADD

17/08/2011 Robert Tyerman

Investors have piled into Falklands-focused Rockhopper Exploration (RKH) since it declared its Sea Lion prospect 'commercially viable'. Following encouraging drilling results from the company's 14/10-6 appraisal well in the North Falklands Basin, analysts are suggesting AIM-quoted Rockhopper could have 1.4bn barrels of oil in place in the South Atlantic, with 357m barrels recoverable in that area's harsh environment.

Chief executive Sam Moody has said the drilling results for this well 'are at the upper end of expectations for the Sea Lion main fan complex.' The company has $170m (£106m) cash, enough for its present needs.

Brokers see a target of more than 640p for Rockhopper shares, despite the hypothetical political risk from Argentina and the various technical challenges. Floated at 42p in 2005, they hit 510p at one point over the past year before a succession of technical and other setbacks knocked them back to 137p.

Last highlighted by Growth Company Investor only last week at 168.75p, the shares have already reached 236p and, though still not risk free, have scope for further gains. 

Tags: AIM market, Falklands, Sam Moody, Sea Lion Field, South Atlantic

Sector: Oil & Gas Producers

Companies: Rockhopper Exploration

Market cap: £610m

PE Forecast: n/a

Share price: 236p