RockRose share price hits new highs on life of field extension and increased reserves (RRE)

By Richard Mason


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The share price of RockRose Energy (LSE:RRE) made new highs on Tuesday, jumping 10pc to £7.20. The move followed news that the life of the Ross and Blake fields is being extended from 2024 to at least 2029. Rockrose holds a 30.82pc interest in the field and the extension will add 4.2 million barrels of oil equivalent (MMboe) to net reserves.

Additionally, RockRose advised that development of its recently acquired Arran field is progressing to schedule with first gas planned for Q1 2021. The plan is for a subsea tie-back to the Shell-operated Shearwater platform and provides RockRose with net 2P reserves of 8.6MMboe.

Also included in the announcement was an update on total reserves.  Combining all of the company’s UK and Netherland’s assets as of 1st January 2019 gives a total for 2P reserves of 35.9MMboe – an increase of 9.4MMboe since the last stated reserves.

It has been a busy 12 months for RockRose who have been strategically acquiring assets during a subdued period for the oil sector. In 2018, RockRose acquired gas and condensate producing assets from Dyas BV in the Netherlands.  This upped the firm’s production, which, including the contribution from Dyas B.V since the effective date of the acquisition (1st January 2018), averaged 10,772 barrels of oil equivalent per day (boepd). The company reported earlier this year that production in December averaged 11,200 boepd.

Forecast production for this year from its existing portfolio of assets remains between 10,000-12,000 boepd.

If you won’t, we will

Despite the company’s growth and enviable financial position – RockRose has no debt and year-end had total cash at bank for $121.4m – the market has struggled to keep up. In November, the company bought back 2,923,240 of its ordinary shares at £5.60. The board of RockRose highlighted that they did not believe the potential of the company’s assets were fairly represented in the share price.  As a result of the tender offer, RockRose’s market capitalization was reduced by 19%.

Commenting on news Tuesday, RockRose’s Executive Chairman, Andrew Austin said:

“The extension of field life at Ross and Blake, supporting the Tain development, further grows the Group’s 2P reserve base, demonstrating the impact of our continued investment in organic growth. As a result, the Company today holds 2P+2C of at least 50.9million barrels of oil equivalent in the portfolio.

“In addition, the programme of infill drilling in the Netherlands has already yielded positive results and lengthens our production profile. The development of Arran remains on track with capex commitments being funded entirely from cashflow.

“The life of the majority of our assets continues to be extended, however, we are successfully and efficiently progressing active decommissioning programmes where necessary in conjunction with our partners. Overall, we remain focussed on continuing to invest in our portfolio to extend field life where possible and to explore options for further value accretive acquisitions.”

Author: Stuart Langelaan

Disclosure: The Author does not own shares in the company mentioned above


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Rockrose Energy

Author: Richard Mason

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.