Rockhopper expects to generate cash flow in excess of two billion dollars

AIM-listed oil and gas exploration company Rockhopper Exploration has published its half-yearly results, revealing strong prospects for cash generation in the years ahead.

The company, which is based in the UK and has interests in the Falklands Islands, was established in 2004 with a strategy to invest in and undertake an offshore oil exploration programme.

During the six month period, the company said it had reached a farm out agreement for cash of $231m, net development carry of $722m and net exploration carry of $48m.

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Since September 30th, the company added that it had completed its farm-out agreement, the extension of licenses and transfer of operatorship.

In the Chairman's statement, Dr Pierre Jungels commented: "The Sea Lion field is now fully financed. This means that for its 2C case, Rockhopper has approximately 142 million barrels of financed oil that from late 2017 should begin generating cash flow with an estimated value to Rockhopper in excess of $2bn at a 10% discount factor."

The first six months to September 30th saw the company announce the farm out and complete the demobilisation of the drilling campaign. The farm out subsequently completed on October 18th meaning that Rockhopper is fully financed for both the development of Se Lion and for a three well exploration programme targeted for 2014.

The company commented further that it was in its strongest position to date.

Chief Executive Officer Samuel Moody , said: "With the farm out now completed, the company is in the strongest position in history. The development is fully funded and we have brought in a proven and highly experienced operator and we have a strong balance sheet all against a very different equity market and financial backdrop.

"There is a huge amount of work to be done in order that all our knowledge and experience of th North Falkland Basin gained over the last eight years has passed on to Premier so that we can more as swiftly as possible towards a final investment decision and then first oil."

MF