North Falkland Basin oil and gas group Rockhopper Exploration saw losses shrink in the year ended March 31st as impairment charges more than halved.
The firm, which is yet to generate any revenues as it ramps up operations, said that its pre-tax loss for the period improved from $87.2m to $53.8m, as the impairment charge dropped from $68.1m to $26.4m. However, the consensus estimate was for a loss of $29.6m.
The loss per share fell from 40.58 cents last year to 19.92 cents, but came in short of the 12.53 cents loss per share expected by analysts.
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During the year, the company completed the appraisal campaign of the Sea Lion field and made four more "significant" discoveries on our operated acreage. "The aim of the appraisal drilling has been to narrow the potential range of the estimated field size and the volumes of recoverable oil contained within it. To this end we drilled a further six wells, one of which was flow tested, and continued to build our understanding of all of the data collected," said Chairman Pierre Jungels.
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A recent report undertaken by a petroleum consultancy rated the change of the Sea Lion development going ahead as designed at a 90% probability "which is high", Jungels said. The study calculated the risked post tax net present values, at a 10% discount rate, of the 2C cash flows as being $3.5bn for the Sea Lion field plus an additional $0.6bn for the satellites.
Jungels assured that Sea Lion is a commercial field and a "play opener" for the North Falkland Basin. "In addition, recent 3D seismic and further interpretation of the older 3D indicates that the exploration potential of the basin is significant and I have no doubts that more discoveries will be made," he said.
The best estimate in place for Sea Lion alone is 1.3bn barrels of oil.
Rockhopper shares opened 1% lower in the opening minutes of Thursday but were trading broadly flat by 08:22.
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