Rockhopper Exploration (RKH)

Business description

Rockhopper is a London-listed E&P with fully funded development of Sea Lion, a 500+mmbbl field in the Falklands as well as the potential of a similar size discovery to the south. It also holds assets in the Mediterranean.

Stock data

Market cap.£114.8m
Last close25.10p
High / Low (52 weeks)27.7p / 18.5p
Stock market listingLN
Forecast net cash (US$m)51.1
Forecast gearing ratio (%)N/A
TeamResources - Oil & Gas
SectorOil & Gas

Price performance

%1m3m12m
Actual3.0(5.5)22.4
Relative *(0.7)(0.8)18.6

* % Relative to local index

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Company news

Y/E Dec Revenue (US$m) EBITDA (US$m) PBT (US$m) EPS (fd) (c) P/E (x) P/CF (x)
2015A 4.0 (32.8) (44.7) 12.02 2.9 N/A
2016A 7.4 (15.2) (18.5) (1.34) N/A N/A
2017E 9.8 (1.5) (12.9) (1.91) N/A N/A
2018E 8.1 (0.4) (13.8) (3.11) N/A 54.1

Last updated on 23/03/2018

Investment summary

Premier Oil’s (PMO’s) FY17 results highlighted progress made by the Sea Lion project operator in securing vendor/debt financing, a key hurdle ahead of the final investment decision (FID). We had previously heavily risked Sea Lion Phase 1, given perceived uncertainty over Premier’s commitment to the project. We believe deleveraging of Premier’s balance sheet, the materiality of Sea Lion in the context of Premier’s development portfolio and progress made with regard to project finance significantly increase our confidence in the project reaching FID. We risk Sea Lion Phase 1 at a 40% chance of success (up from 20%), increasing our valuation of Rockhopper (RKH) from 44.2p/share to 62.9p/share (+42%).

Last updated on 06/04/2018

Industry outlook

Small and mid-cap E&Ps have struggled in recent years to secure funding to develop major oil and gas projects. In response, the Sea Lion JV is considering export credit finance and vendor/contractor finance as an alternative funding route for field development.

Last updated on 06/04/2018

Key management

Sam Moody, CEO
Stewart MacDonald, CFO

Company address

Hilltop Park
Devizes Road
Salisbury
SP3 4UF
United Kingdom
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