Rockhopper Exploration (RKH) H2 2023 earnings summary

Executive summary

• Advanced the Sea Lion development with increased resources, reduced costs, and improved project financeability; 2C resources now 791mmbbls and initial recovery target 312mmbbls at a peak rate of 55,000bbls/d.

• Monetisation agreement for Ombrina Mare Arbitration Award signed, with up to €80m in potential proceeds, subject to government approval and annulment outcome.

• Strong balance sheet maintained with $8.0m cash at year-end and $2.0m additional post year-end from warrant exercises.

• Board succession completed, with new Chair and Non-Executive Director appointments.

Financial highlights

• No revenue in 2023 (2022: $0.7m); loss after tax of $4.6m (2022: profit $35.5m, which included a one-off tax credit).

• Administrative expenses rose to $4.3m (2022: $3.6m), mainly due to legal fees for arbitration.

• Cash and term deposits at $8.0m (2022: $9.8m); $3.7m raised from warrant exercises during the year.

• Cost of sales reduced to $0.9m (2022: $2.0m); impairment charges of $0.2m.

Outlook and guidance

• 2024 targets: progress Sea Lion to Final Investment Decision, complete Ombrina Mare monetisation, and further strengthen the balance sheet.

• Confident in legal case for Ombrina Mare; hopeful for a favourable annulment decision by end of 2024.

• Sea Lion project positioned as highly competitive globally, but faces geopolitical risks related to Falkland Islands sovereignty.