Rockhopper Exploration (AIM: RKH) has announced the completion of an open offer of shares, raising a total of around $3.4 million (£2.8m) as it looks to shore up finances to progress the long-awaited Sea Lion project.
In a 5 July statement the company said it had had acceptances from shareholders for 39,652,160 – or just over 69% – of the units offered, raising total gross proceeds of around £2.8m.
It takes the gross proceeds of the company’s capital raising to approximately $10.4m (£8.5m), through the issue of 121,834,936 new ordinary shares and 60,917,237 warrants.
The Company has applied for the admission of new shares for trading on the AIM, with a second admission planned for 8am on 7 July 2022.
The fundraising comes in the wake of an agreement by Navitas Petroleum to increase its stakes in the Sea Lion project off the Falkland Islands, having struck a deal with former owner Harbour Energy to take on its licences in the territory.
Pre-development work on the first phase of Sea Lion, targeting 250 million barrels of oil using an FPSO, was put on hold in 2020 due to market conditions.
The agreement leaves Navitas with a 65% operated stake in the project following the close of the deal, while Rockhopper Exploration holds 35%.
In April Rockhopper said it would work with Navitas to jointly develop a technical and financing plan to achieve first oil “on a lower cost and expedited basis post sanction.”
In a 15 June statement Rockhopper CEO Sam Moody said the company’s strategy was now to “maximise the likelihood of project sanction” at Sea Lion which, at current oil prices would likely prove “highly material” for shareholders.
Subject to a positive final investment decision (FID), Navitas will provide an interest-free loan to Rockhopper to fund two-thirds of its phase one development cost, however Rockhopper still requires funding to pay its reduced corporate costs, licence fees, and costs associated with the transaction – necessitating its latest capital raise.
At the time, the company estimated that it would require additional funding of a minimum of $4.5m (around £3.7m) to run for the next year.
Speaking following the 5 July offer, Mr Moody said: “We are delighted that our investors have taken the opportunity to subscribe to the Open Offer and strengthened their support for the company – we are very grateful and look forward to progressing our plans for Sea Lion with our new partner Navitas.”
In the meantime, Rockhopper also awaits an arbitration decision on its dispute with the Italian government over the Ombrina Mare field, for which the company failed to clinch a final concession when Italy reinstated a near-shore exploration ban.
It hopes to be awarded “very significant monetary damages” based on lost profits as a result of the decision, with a verdict expected by late August, or 22 October 2022 at the latest.