Rockhopper, Desire agree Falklands transactions

Oct. 12, 2011
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