Rockhopper Exploration

LN: RKH

£77.1m market cap

16.82p 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. It also holds production and exploration assets in the Mediterranean.

Investment summary

In January 2020 Rockhopper announced that, together with Premier Oil, it has signed Heads of Terms with Navitas Petroleum to farm down a 30% interest in the Sea Lion project. The deal increases confidence that project debt financing to the joint venture can be secured successfully for Sea Lion Phase 1 of development, while Rockhopper maintains a material 30% stake in Sea Lion, and Premier 40% and operatorship. Rockhopper’s share of project costs will now be covered from 1 January 2020 through to Phase 1 completion, pending sanction. Meanwhile, partner Premier has announced a series of significant North Sea M&A deals, which materially strengthen its balance sheet and further support the Sea Lion project financing discussions. The Ombrina Mare arbitration outcome is expected in the next three to six months and the company believes it has good prospects of recovering significant monetary damages. Our risked valuation currently stands at 53.7p/share.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2017A 10.4 (2.4) (12.6) (4.5) N/A 61.7
2018A 10.6 (4.4) (11.7) (1.4) N/A 18.5
2019E 10.4 4.9 (7.2) (6.6) N/A 115.3
2020E 2.2 (3.7) (12.7) (18.6) N/A N/A
Industry outlook

Sea Lion JV is considering export credit and vendor/contractor finance as alternatives for field development. Contractor selection and finalising of LOIs to underpin the provision of vendor funding is progressing.

Last updated on 18/02/2020
Sector
Oil & gas
Share price graph
Balance sheet
Forecast net cash (US$m) 17.8
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (10.2) 3.8 (26.5)
Relative* (7.2) 1.7 (29.5)
52-week high/low 28.0p/14.0p
*% relative to local index
Key management
Sam Moody CEO
Stewart MacDonald CFO

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