Rockhopper has made further progress today on its proposed farm out deal with Premier Oil for its North Falkland Island acreage – as yet the only commercial oil found in this region. It announced that it has received formal agreement from the Falkland Islands Government and also both relevant licensees to the farm-out agreement with Premier Oil. The 60 percent ownership change and change of operator to Premier were sanctioned.
Of particular interest to shareholders was confirmation that formal completion of the farm-out process is anticipated shortly. Hence one of the uncertainties holding the share price back in recent week is almost certainly to be removed.
The shares dropped as low as 156p last week on unsubstantiated rumours of director selling. A spreadbet conviction buy at 157p was on the money with Rockhopper trading at 170p this morning.
Fellow North Falkland explorer Argos Resources has been perky of late with a 12% rise to 27.5p yesterday. Rumours persist of a farm out deal announcement at the AGM on the 19th.
The possibility that Rockhopper/Premier expand their acreage to the adjacent Argos property is certainly a possibility, though I’m sure price could a barrier and with the hurdles still to be overcome to bring the Sea Lion discovery oil to market, they may decide to leave Argos alone for now. But certainly a deal consolidating Argos’s, Desire’s and Rockhopper’s acreage makes strategic and economic sense, against the background of continued Argentinian opposition.
Contrarian investor UK