Amid the gloom Rockhopper Exploration, one of the oil groups drilling in the Falklands, is shining out with a near 40% rise in its shares.
It has added 56.25p to 197.25p after it said an appraisal well at its Sea Lion project showed results at the top end of expectations. Chief executive Sam Moody said oil-charged sands extended to the west of the original well, which means it could be commercially viable. In a buy note Richard Rose at Oriel Securities said:
This a highly encouraging result helping firm up the commercial viability of the discovery and increasing mid-range resource estimates for the field. The company had previously indicated 150m barrels of discovered resources in the eastern lobe of the main fan and although not yet disclosed we believe this result is likely to push recoverable reserves into the range of 200m-250m barrels.There have been a number of conflicting results from a number of companies drilling in the area, which is still controversial because of Argentina's continuing claim to sovereignty.
The shares have been hit hard with the recent market sell-off but this well result should go a long way to addressing the concerns over the size and commerciality of the Sea Lion discovery.
