Rockhopper Exploration

LN: RKH

£82.4m market cap

18p 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

The Rockhopper (RKH)/Premier Oil (PMO) joint venture (JV) has submitted the preliminary information memorandum (PIM) to potential providers of senior debt project finance for the Sea Lion development. Submission of the PIM is supported by independent expert reports covering a range of technical, legal and tax aspects of the Sea Lion project. The JV views this as a material milestone and anticipates moving into detailed lender due diligence and documentation in Q419. In June, Italy's request for the suspension of the Ombrina Mare arbitration was rejected. RKH is seeking significant monetary damages and an award is now expected in Q120. Confirmation of Sea Lion FID and a successful arbitration outcome for Ombrina Mare have the potential to close the gap between the current share price and our valuation. We continue to assume a Sea Lion phase 1 first oil date of mid-2024, with our risked valuation standing at 79.6p/share.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2016A 10.4 (15.2) (9.0) (4.5) N/A 63.4
2017A 10.6 (2.4) (7.1) (1.4) N/A 19.0
2018E 10.7 (4.4) (2.1) (6.1) N/A 91.3
2019E 2.2 5.2 (9.7) (18.1) N/A N/A
Last updated on 21/08/2019
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 for $400m is progressing.

Last updated on 21/08/2019
Sector
Oil & gas
Share price graph
Balance sheet
Forecast net cash (US$m) 27
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (20.7) (20.5) (51.4)
Relative* (17.7) (19.2) (48.7)
52-week high/low 39.5p/17.4p
*% relative to local index
Key management
Sam Moody CEO
Stewart MacDonald CFO

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