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Rockhopper Exploration reveals upgrades to Sea Lion development

For the same money as previously budgeted it is now planned that Sea Lion will flow up to 85,000 bopd in Phase 1a, up from 60,000, and the field will now access up to 220mln barrels of resources.
Rockhopper Exploration reveals upgrades to Sea Lion development
Sea Lion will have a significantly lower breakeven, Rockhopper says

Rockhopper Exploration (LON:RKH) has revealed that plans have been upgraded for the first phase of the Sea Lion oil field development, in the North Falkland basin.

The oil field’s first phase will now address some 220mln barrels of oil, rather than 160mln under the previous plan, the company said.

Peak production in the initial phase is now expected to reach 85,000 barrels of oil per day (bopd), up from 60,000. There will be a total of 18 wells in the first phase, not 14, and ‘first oil’ will come after 13 wells have been drilled.

Lower capital costs, a result of low crude prices, mean that this larger programme will come within the original US$1.8bn budget to achieve first oil.

Rockhopper added that the improved field economics will mean that Sea Lion will have a significantly lower break even threshold.

The company also told investors that draft field development plans have been submitted to the Falkland Island Government.

A final investment decision is now scheduled for mid-2017, which puts 'first oil' in 2020.

This new information has been released whilst Premier Oil (LON:PMO), the project operator and controlling stakeholder, is suspended from trading pending news of a potential ‘reverse takeover’ transaction.

And, it comes just day after Rockhopper got a boost from the confirmation of another oil discovery in the North Falkland basin.

The newly discovered system, which comprises a number of new reservoirs including Isobel Deep, add significantly to the resource volumes in the basin and could in time provide a third phase of field development to the area.

On AIM, Rockhopper shares gained around 5.5% to trade at 28.5p.

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