Rockhopper provided a summary of the Company's recent drilling operations in the North Falkland Basin and also outlines a development plan for its Sea Lion Discovery.
The Company has worked up a development plan on the basis of a recoverable resource of 350 mmbbls using a leased FPSO. The other principal assumptions set out in the plan include an estimation of first oil being achieved in early 2016, with maximum production of 120,000 bpd by 2018, and development costs to first oil expected to be in the region of $2 billion.
The Company expects to complete its concept engineering studies in the first quarter of 2012 and shortly thereafter to commence its Front-End Engineering Design (FEED). The FEED is expected to be completed and submitted to the Falkland Islands Government in the first quarter of 2013, by which time the Company would expect to have awarded the contracts to the FPSO provider and subsea contractor.
Accounting for all outstanding payments for well 14/10-6, the previous well drilled, the Company estimates that it will have cash resources of $170 million. The Company is therefore fully funded to complete 14/10-7, the current well, and the remaining two committed drilling slots that it has with the Ocean Guardian. The Company is considering its position as to whether it will take up any additional options on the Ocean Guardian.
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