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Rockhopper Exploration plc

Recently Rockhopper has found itself dressed down by the markets however there is a clear investment case as shares change hands at 102.50p. Recently we have seen a number of institutions winding down their positions which has clearly weighed heavily on the company’s valuation although we see the current weakness to be a buying opportunity.

Rockhopper has significantly de-risked their assets by agreeing a favourable farm-out with Premier Oil, whilst maintaining a real spirit and gusto towards their development program on a fully funded basis in its sea lion project which forecasts a maximum output of 100,000 b/d.

Simon Lockett, Chief Executive of Premier, commented:”We are delighted to complete this agreement with Rockhopper. As operator, we will progress Sea Lion to final development sanction and work closely with the Rockhopper team to mature the exciting exploration opportunities in our shared acreage.”

The framework of the Falklands is yet to fully unwind however peering into the crevasse of the South Atlantic Oil & Gas industry has left VTM believing the market has not fairly taken into account Rockhoppers strong cash position (£150m) and fundamental strength.

Buy RKH with a 90p stop loss and a 200p target price

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