Rockhopper Exploration (LON:RKH) , the oil and gas group working in the North Falkland Basin oil, this morning reported that it had begun drilling the 14/10-3 exploration well. The new well lies 8km north-west of Rockhopper’s Sea Lion 14/10-2 discovery well on Licence PL032, where the company holds a 100% working interest.

The well is located on the undrilled northern lobe of the Sea Lion fan system. It will also penetrate the distal, downdip portion of the newly-identified and underlying S2 fan body which has been mapped over an area of 42 sq km. 14/10-3 is situated outside of the Sea Lion discovery area. Total depth is planned to be around 3,000 metres with drilling operations expected to take approximately 38 days.

It is currently anticipated that, on completion of operations on 14/10-3, Rockhopper will drill 14/10-4, an appraisal well on the southern lobe of the Sea Lion fan system within the discovery area, before the rig is released.

Rockhopper drilled the Sea Lion well in April 2010 and went on to complete a successful flow test of the well over the summer. The news triggered a substantial re-rating of the company’s shares, which moved from 37p to 145p immediately after the discovery announcement and later hit a record 501p in September. In trading this morning the shares were down by 1.5% to 375.75%. Last November the company raised £206m in order to fund an appraisal of Sea Lion, drill further exploration wells and acquire further 3D seismic data, as well as commission engineering studies to a produce a field development plan.

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