Rockhopper, Desire agree Falklands transactions

Desire Petroleum has agreed to farm out part of its exploration acreage in the offshore North Falkland basin to Rockhopper Exploration.

Offshore staff

LONDON – Desire Petroleum has agreed to farm out part of its exploration acreage in the offshore North Falkland basin to Rockhopper Exploration.

The farm-out applies to around 23% of the Tranche D (PL004 license) and covers an area over which a 3D seismic survey was acquired earlier this year. The processed data has recently been interpreted and evaluated.

The farm-out area has been divided as follows: 

• Area 1 (the northwestern part of PL004) 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 a well in Area 1 to earn a 52.5% interest, lifting its total equity to 60%, the balance held by Desire. Rockhopper will assume operatorship of this area. 

• Through drilling the commitment well, Rockhopper will also earn a 17.5% interest in Area 2, raising its equity here to 25%, with Desire retaining 75% and operatorship. 

• Area 2 (the northeastern part of PL004) includes the recently delineated Jayne, Shona East, Casper East and Catriona prospects and the remainder of the Beverley prospect. 

• Subject to approvals, Rockhopper will co-fund a well to be drilled in Area 2 during the Ocean Guardian’s current drilling campaign, assuming that Desire opts to drill a further well. That will depend on the results of ongoing technical studies.

The farm-out agreement remains conditional on Rockhopper raising additional capital through an equity placing.

10/12/2011

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