Rockhopper Exploration are a UK-based Oil & Gas exploration company, In August 2005 the company were designed and floated with a view to exploiting the Oil & Gas potential in and around the Falkland’s waters, Exactly 11 years on and the company really has followed its own (in-house) mission statement of Explore, Appraise and Develop. Rockhopper became top of the pops back in February 2012 as shares soared to around 400p. The irony today is the Falkland heavy weight has appraised and now develops one of the biggest offshore oil finds in the last decade whilst shares trade heavily discounted at circa 29p giving a market cap of £130m.
Life at Rockhopper has seen a number of key developments both around the Mediterranean (Italy) and more importantly the Falklands. The board are also quietly looking to potentially dip its toe into Egypt or potentially North Africa, The roller coaster of highs and lows has woven a fabric which has not only presented opportunity but forged the start of a meaningful legacy as an Oil & Gas player. The sigma of deliver-ability shall come from pumping barrels of black gold yet the cyclical nature in the history of the company has shown that this business has the grit and determination needed to reinvigorate the lionization process of becoming the darling of Aim once again.
In 2010 Rockhopper announced it had drilled the exploration prospect Sea lion which had resulted in a potentially game changing oil discovery, By September the well had been flow tested resulting in a material off shore oil find within the North Falkland basin, fast forward 2 years and the company were approached by Premier Oil who looked to farm into the asset and JV with Rockhopper, reducing the companies risk exposure in the Falklands. One could ask, why has the market cap slipped to a meager £130m given the company has dramatically de-risked it’s operations in the Falklands along with new exposure in the Med and circa $110m in the bank (as of Dec 2015).
The company has tangible assets, a decent cash position coupled to a free carried interest in its major oil discovery, bolt-on additional early success at Isobel and Zebedee with gentle institutional murmurings throughout the companies peer group and its only a matter of time before $40 oil becomes $60-80+ which will act as a catalyst to indexing Rockhopper as one of the most obvious stock picks of 2016-2017.