Shares of Rockhopper Exploration have fallen on Wednesday following the company's update regarding its Sea Lion project.
The AIM-listed oil and gas exploration company has been operating in the Falkland Islands since 2004, where the Sea Lion project is based.
The company said that it is keen to move forward with the project despite the scaling back of headcount and activity due to the fall in oil prices experienced in March 2020.
Despite the scale back, a reduced team progressed several regulatory and commercial workstreams on the project, including the development of Sea Lion's net-zero emissions plan and finalising the terms of the Navitas farm-in.
There is a $222.6 million one-off non-cash impairment, based on a decision to write off the historic exploration costs associated with the resources, which will not be developed as part of the Sea Lion Phase 1 project.
There is an issue in that the operator has changed with Premier Oil plc and Chrysaor Holdings Limited merging to create Harbour Energy plc, which does create a more significant and financially stronger operator, but Rockhopper did state that there “can be no guarantee around Harbour's future intentions for Sea Lion.”
Keith Lough, Chairman of Rockhopper, commented: “The company will continue to work closely with all stakeholders to maximise the chance of securing the Navitas farm out and project sanction of Sea Lion.
“The Board believes that the opportunity to invest in a world-scale fully appraised and engineered project with material additional upside at this point in the cycle presents a compelling opportunity, and one which would lead us towards unlocking the value within the project long-awaited by all stakeholders.”
Rockhopper Exploration's share price fell over 8% to 8.86p following the update.
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