FALKLANDS oil and gas explorer Rockhopper Exploration said yesterday its Sea Lion discovery was larger than thought after analysis on new seismic data, further boosting hopes for the region.
The UK-based company’s shares jumped on the news, finishing the day up nearly 9% at 237p.
The firm said a 3D survey shot over 2,500 square miles this year, plus data from five exploration wells, showed its 100%-owned Sea Lion main complex (SLMC) extended further than thought.
It also identified two new prospects it named Casper and Kermit and laid out its future drilling programme, including potentially a further three wells on top of its current plans.
Chief executive Sam Moody said: “We are highly encouraged by the interpretation of new seismic data which identifies both significant reservoir extension and the existence of two additional fan prospects above and beneath the SLMC.
“We look forward to continuing our drilling programme as we seek to further refine our understanding of Sea Lion and the other prospects on our licences.”
The firm said initial analysis of the data upgraded the medium reserves estimate for the Sea Lion area to 1,086million barrels of oil, with a further 10% additional volume in Desire Petroleum’s neighbouring licence, in which Rockhopper has a 7.5% stake.
Based on achievable recovery rates of 30-40%, Rockhopper said it could recover 325-434million barrels of oil from the SLMC on a mid-case estimate. In April, Rockhopper had raised its estimate of minimum recoverable oil reserves at Sea Lion to 155million barrels.
The company is now set to drill a further three wells, following completion on its fifth well, 14/10-6, using the Ocean Guardian drilling unit. These will be north-west, south south-east and south-west of the 14/10-2 discovery well.
It is now also looking at drilling additional wells under an assignment agreement, but this would be dependent on the results of its next well, 14/10-7.
Desire said, while it was unable to confirm Rockhopper’s interpretation of the data, it welcomed the announcement.
It said: “The results of this well are encouraging for the Shona lead which was previously identified from the raw stack data.”
Desire said it continued to analyse its seismic data for the northern part of its Tranche D and the Ann prospect area, with results expected next month.
Rockhopper is one of several explorers drilling in waters off the coast of the British-governed Falkland Islands, over which Argentina claims sovereignty and where there is no existing oil and gas infrastructure.