Rockhopper Exploration

LN: RKH

£35m market cap

7.68p last close

Rockhopper is a London-listed E&P with fully funded development of Sea Lion, a 500+mmbbl field in the Falklands as well as the potential of a similar size discovery to the south.

Investment summary

In January Rockhopper (RKH) announced that, together with Premier Oil, it has signed a heads of terms with Navitas Petroleum to farm down a 30% interest in the Sea Lion project. The deal increases the likelihood that project debt financing to the JV can be secured successfully for Phase 1 of development, while RKH maintains a material 30% stake in Sea Lion and Premier 40% and operatorship. RKH’s share of project costs will be covered from 1 January 2020 through to Phase 1 completion, pending sanction. In March, RKH reiterated that despite the current oil price, all parties remain committed to finalising the agreement with completion subject to agreed consents and approvals. RKH is in a relatively stable financial position with no debt and limited exposure to future development costs at Sea Lion. Our valuation stands at 24.4p/share.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2018A 10.6 (4.4) (7.1) (1.0) N/A 8.1
2019A 10.3 (2.2) (20.6) (44.0) N/A N/A
2020E 2.2 (3.3) (4.5) (7.0) N/A N/A
2021E 1.7 (2.6) (4.1) (6.0) N/A N/A
Industry outlook

The Ombrina Mare arbitration outcome is expected in the coming months and the company believes it has strong prospects of recovering significant monetary damages.

Last updated on 25/07/2020
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Sector
Oil & gas
Share price graph
Balance sheet
Forecast net cash (US$m) 10.2
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (2.2) 16.9 (66.6)
Relative* (2.3) 9.1 (59.7)
52-week high/low 22.5p/4.0p
*% relative to local index
Key management
Sam Moody CEO
Stewart MacDonald CFO

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