Rockhopper takes North Falkland farmout from Desire

Rockhopper Exploration PLC has taken a farmout from Desire Petroleum PLC on the northern part of Tranche D (PL004) license in the North Falkland basin, subject to government approval.

Rockhopper Exploration PLC has taken a farmout from Desire Petroleum PLC on the northern part of Tranche D (PL004) license in the North Falkland basin, subject to government approval.

Farmout terms include drilling a well with the Ocean Guardian semisubmersible during the current drilling campaign.

The farmout area covers 23% of Tranche D and comprises part of the area on which a 3D seismic survey was completed earlier in 2011. Processing of the seismic data over the area farmed out has been fast-tracked and has recently been interpreted and evaluated.

The area farmed out has been divided into Areas 1 and 2. Area 1 includes a possible extension of Rockhopper’s Sea Lion oil discovery, the recently delineated Shona West prospect, the Casper West prospect, and part of the Beverley prospect.

Rockhopper will pay 100% of the committed well in Area 1 to earn a 52.5% interest. With its existing 7.5% interest, this will bring Rockhopper’s equity to 60% with Desire at 40%. Rockhopper becomes operator of Area 1.

By drilling the committed well in Area 1, Rockhopper will also earn a 17.5% interest in Area 2 which, including Rockhopper’s existing 7.5% interest, will bring its equity to 25% in that area, with Desire retaining 75% equity as operator.

Area 2 includes the recently delineated Jayne, Shona East, Casper East, and Catriona prospects and part of the Beverley prospect.

Rockhopper, subject to technical approval, will support at its 25% equity a well drilled in Area 2 during the current Ocean Guardian drilling campaign should Desire decide to drill a further well. Drilling this well will depend on further technical work currently being undertaken by Desire and subject to Desire raising any necessary funds. The farmout is also conditional on Rockhopper raising more capital.

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