Published: April 20, 2016 |

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Rockhopper Exploration Plc has struck new terms for a proposed acquisition of production and exploration assets in Egypt.

Last summer the AIM listed oil company attempted to acquire the assets from Beach Energy but the deal didn’t proceed due to an exercise of pre-emption rights by one of the seller’s partners (in the the Abu Sennan concession).

Now, Rockhopper expects new terms to represent a material improvement in the prospective value of the transaction.

It plans to acquire each Petroleum (Egypt) Pty Limited – which owns 22 percent of the Abu Sennan concession and a 25 percent interest in the El Qa’a Plain concession – for US$11.9mln in cash.

Concurrently, Rockhopper has agreed to sell a 5 percent stake in the Abu Sennan concession to Dover Petroleum Corporation, an affiliate to a partner in the concession. Rockhopper would then own 17 percent of Abu Sennan, and the overall acquisition value effectively reduces to US$9.3mln.

Rockhopper expects to see working interest production of around 1,000 boepd as a result of the deal, and it would have an additional 3.5mln barrels of oil equivalent reserves. When combined with existing revenue generating production in Italy the company would expect to see between 1,500 and 1,800 boepd for 2016.

It comes as the group continues to diversify and expand its portfolio beyond its exploration-cum-development assets in the waters off the Falklands.

Sam Moody, Rockhopper chief executive, said: “A patient approach to this transaction has paid dividends for Rockhopper and we are delighted to have reached agreement with Beach on the amended terms of the acquisition of Beach Egypt.

“We believe this deal is a strategically important step, perfectly suited to the current economic environment for the industry, where low cost, cash generative assets are increasingly important.

“With the upfront cash consideration payable broadly flat and reducing in the event of the proposed Dover transaction, the implied transaction multiple falls to US$2.7 per barrel of oil equivalent.”

“With low unit cash operating costs at approximately US$8 per barrel in 2015, we expect this portfolio to be net cash flow positive, even in the current oil price environment.”

Source: (April 18, 2016) Proactive Investors

About Rockhopper Exploration
Rockhopper Exploration Plc is a United Kingdom-based oil and gas exploration company. It has with licenses to explore oil and gas in the North Falkland Basin. Rockhopper has 100 percent of four licenses in the North Falkland Basin, PL023, PL024, PL032 and PL033. PL023 and PL024 licenses cover an area of 2100 square kilometers and PL032 and PL033 licenses cover 1620 square kilometers. It has also farmed in to licenses PL03 and PL04, which cover an area of 1340 square kilometers.

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