Rockhopper up on Cairn takeover rumours
Rockhopper Exploration, the Falkland Islands focused oil and gas company, has risen this morning on rumours of a possible takeover by Cairn Energy.
Rockhopper Exploration, the Falkland Islands focused oil and gas company, has risen this morning on rumours of a possible takeover by Cairn Energy.
The Sunday Times reported yesterday that cash rich Cairn, which made billions by developing fields in India, is interested in taking over Rockhopper's key asset, the Sea Lion field, 80 miles north of the Falklands.
The move would be a big adventure for Cairn, which has so far failed in its current campaign off the coast of Greenland.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
![https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg](https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748-320-80.jpg)
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The problems for investors in Rockhopper are two fold.
Firstly, there needs to be huge investment in the Falkland Islands to build the infrastructure necessary to support a major oil industry, the estimated cost is £2bn.
The second problem is a slight issue with the neighbours.
Argentina still claims sovereignty over the Falklands and is supported by Brazil. Both of those countries will refuse any logistical support to production.
Argentina has also said it will prevent any companies engaged in the Falklands from working in its recently discovered shale fields.
The one problem a purchaser of Rockhopper does not face, however, is a lack of oil.
Current estimates are that the company is sitting on 500 million barrels of black gold, which would fetch around $55bn at today's prices.
Shares in Rockhopper have gained 10% this morning.
Over the last 12 months the stock has dropped 19%, although since the Sea Lion discovery in 2010 the shares have gained nearly 650%.
Its current market cap is £858m.
BS
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Regulator moves to protect access to cash amid branch closures and disappearing ATMs
News The Financial Conduct Authority has told banks to start assessing if local communities have adequate cash access from mid-September
By Marc Shoffman Published
-
VAT hike on private school fees could come earlier than previously expected
The government could start charging VAT on private school fees as soon as January 2025, according to the latest reports. What does it mean for parents?
By Katie Williams Published