REG - Rockhopper Exp plc - Annulment Insurance and Disposal of Italian Assets

Rockhopper ExplorationAnnouncement

29/08/2025 07:00

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RNS Number : 1367X  Rockhopper Exploration plc  29 August 2025

29 August 2025

Rockhopper Exploration plc

("Rockhopper" or the "Company")

 

Annulment Insurance and Disposal of Italian Assets

 

Rockhopper Exploration plc (AIM: RKH), the oil and gas company with key
interests in the North Falkland Basin, is pleased to provide the following
update in respect of the insurance policy announced on 14 October 2024,
intended to protect against an unsuccessful outcome in the Ombrina Mare ICSID
arbitration, and the exit of Rockhopper's other Italian assets, as also
announced on 14 October 2024.

 

Annulment Insurance

 

Rockhopper is delighted to confirm that it has now received the full €31
million entitlement under the insurance arrangements (the "Insurance
Proceeds").

 

A new request for arbitration has been drafted and is expected to be submitted
in the coming weeks. An update will be provided in Rockhopper's interim
results to 30 June 2025. Under the agreement (the "Monetisation Agreement")
with the new funder announced on 20 December 2023, the costs of contesting the
new request for arbitration are borne by the new funder.

 

To the extent that Rockhopper makes a financial recovery from any new
arbitration, after deductions for any reasonable costs and expenses incurred,
that recovery will be utilised to reimburse the insurers in respect of the
Insurance Proceeds.

 

Italian Disposal

On the 14 October 2024, Rockhopper announced its planned exit from Italy
through the signing of a share purchase agreement ("SPA") with Zodiac Energy
Limited ("Zodiac"). The SPA is for the sale of Rockhopper Civita Limited (a
wholly owned subsidiary of Rockhopper Exploration Plc). Rockhopper Civita
Limited holds all Rockhopper's Italian assets and liabilities, except for the
Ombrina Mare arbitration.

The SPA is conditional on receipt of approvals from the Falkland Islands
Government and the Italian regulator. As part of this approval process, the
Italian regulator requested the recapitalisation of Rockhopper Civita Limited
(the "Recapitalisation") before consideration be given to the proposed
transfer.

 

The Recapitalisation has occurred; however, this was not envisaged under the
SPA and so an amended SPA (the "Amended SPA") has now been agreed and signed.
Under the terms of the SPA, Rockhopper would have paid Zodiac in two
instalments, with a retained upside participation to Rockhopper in two
undeveloped licences (the "Earn Out Agreements"). Under the SPA, the second of
those instalments and the Earn Out Agreements were contingent on successfully
defending the Republic of Italy's annulment application and receiving a
minimum of €10 million from the Monetisation Agreement. Following receipt of
the €31 million of Insurance Proceeds the substance of the Amended SPA is as
previously announced, except the second contingent tranche and associated Earn
Out Agreements are no longer contingent and as if Rockhopper had won the
annulment. The key terms of the Amended SPA are:

 

·    As consideration for the transaction, Zodiac will pay £1 and assume
any outstanding liabilities from Rockhopper to Rockhopper Civita Ltd, such
amounts not to exceed €4.5 million.

 

In turn, on completion, Rockhopper will:

·    Provide evidence of the Recapitalisation and any subsequent
additional recapitalisations;

 

·    Provide evidence of there being no less than €5.5 million, in
aggregate, in Rockhopper Civita Limited's cash and term deposits balances; and

 

·    Receive the Earn Out Agreements - meaning that Rockhopper will retain
a royalty on two assets within the Rockhopper Civita Limited portfolio, those
being AC19 (a northern Adriatic licence with two gas discoveries and an
additional adjacent prospect) and Serra San Bernado (which contains the Monte
Grosso exploration prospect).

 

The royalties will take the form of either 10% of the revenues of the
interests acquired by Zodiac or, should they realise value by on-selling the
licences acquired, 25% of the gross proceeds received for the part sold.

 

The transaction continues to be subject to both Italian regulatory and
Falkland Islands Government approval, the timing of which is uncertain. To
allow for the delays caused by the Recapitalisation, the longstop date under
the Amended SPA has been revised to 31 March 2026, which should be sufficient
to enable these approvals to be given.

 

Following completion of the transaction, Rockhopper will have no remaining
liabilities relating to its Italian licences, its P&A liability will have
been reduced by some US$12.6 million (as at 31 December 2024) and its annual
cash burn reduced by approximately €500,000 - €750,000.

 

Samuel Moody, CEO of Rockhopper, commented:

"The steps announced today provide us with further strategic and commercial
clarity as we continue to focus on progressing the Sea Lion development. The
combination of the insurance and transaction with Zodiac allows us to refocus
the Company on Sea Lion by further reducing both short- and long-term costs,
reducing risk, and protecting our balance sheet whilst maintaining some
potential upside in two Italian licences."

See RNSs dated 20 December 2023, 17 June 2024 and 21 June 2024 for further
background on the monetisation of the Ombrina Mare award

 

 

Enquiries:

 

Rockhopper Exploration plc

Sam Moody - Chief Executive Officer

Tel. +44 (0) 20 7390 0234 (via Vigo Consulting)

 

Canaccord Genuity Limited (NOMAD and Joint Broker)

Henry Fitzgerald-O'Connor/James Asensio/Charlie Hammond

Tel. +44 (0) 20 7523 8000

 

Peel Hunt LLP (Joint Broker)

Richard Crichton/Georgia Langoulant

Tel. +44 (0) 20 7418 8900

 

Vigo Consulting

Patrick d'Ancona/Ben Simons/Fiona Hetherington

Tel. +44 (0) 20 7390 0234

 

 

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