REG - Rockhopper Exp plc - Half-year Report
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RNS Number : 1072B Rockhopper Exploration plc 29 September 2025
29 September 2025
Rockhopper Exploration plc
("Rockhopper", the "Group" or the "Company")
Half-Year Results for the Six Months Ended 30 June 2025
Rockhopper Exploration plc (AIM: RKH), the oil and gas company with key
interests in the North Falkland Basin ("NFB"), announces its unaudited results
for the six months ended 30 June 2025 ("H1 2025").
YEAR TO DATE HIGHLIGHTS
Capital Raise
· Firm and Conditional two tranche placing to raise up to US$140
million
· Company to undertake Open Offer for up to an additional €8 million
Firm placing US$115 million
· 53p per share plus one underwriting warrant for every four shares, at
a price of 80p per share
· Expected to fund Rockhopper capex requirements for Phase 1
development plan for Sea Lion
· Funds held in escrow pending Final Investment Decision ("FID") for
Sea Lion Phase 1 development
Conditional placing US$25 million
· 53p per share plus one underwriting warrant for every four shares, a
price of 80p per share
· Approved by shareholders at a General Meeting on 16 September 2025
· Provides additional funding flexibility for subsequent phase
planning, first phase contingencies and early project decommissioning
· Funds held in escrow pending occurrence of FID
Open Offer up to €8 million
· To be held at FID, 53p per share
· Provides shareholders the opportunity to participate at the same
price as those in the placings
· No underwriting warrants as investors will not be required to
subscribe funds to the escrow account
· Capped at €8 million under the Prospectus Regulations
Independent Resource Evaluation
· Carried out by Netherland Sewell and Associates ("NSAI")
· Sea Lion oil only numbers
· Unrisked gross contingent resources 2C 917 mmbbls
o 321 mmbbls net to Rockhopper
· Unrisked gross contingent resources development pending 2C 727 mmbbls
o 255 mmbbls net to Rockhopper
· Valuation of the Rockhopper net 2C 255mmbbls 35% working interest in
Sea Lion
o $1.3bn at US$60 brent oil
o $1.8bn at US$70 brent oil
o $2.3bn at US$80 brent oil
o Net of all royalties and taxes
Ombrina Mare Arbitration Award (the "Award")
· Award fully annulled
· Insurance monies of €31 million now received (the "Insurance
Proceeds")
· New funder and Rockhopper have submitted a new request for
arbitration
· 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
· Amended SPA signed. Transaction completion subject to required
regulatory consents.
· Allows Company to re-focus entirely on the Falklands
Outlook
· Funded for FID based on current financing plan
· Independent NSAI report confirms scale of opportunity
· Balance sheet strongest for over 5 years, with US$54m cash resources
(unaudited) as at 31 August 2025
· Operator continues to target FID by year end 2025
Samuel Moody, CEO of Rockhopper, commented:
"This has been a transformative period for Rockhopper and the last few months
have seen an acceleration of progress towards FID. A financing plan is in
place for which we have secured our base equity requirement and the potential
value to all stakeholders is independently confirmed.
"We are very grateful for the support of shareholders, both existing and new,
at the recent fundraise. Having passed all of resolutions at the recent
General Meeting, US$140 million is now in escrow pending FID, which we are
more hopeful than ever of reaching by the end of this year."
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
CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S REVIEW
Introduction
Rockhopper's strategy is to create value for all our stakeholders through the
safe and responsible development of our assets in the North Falkland Basin
("NFB"). The Company has been operating offshore the Falkland Islands since
2004 and discovered the Sea Lion oilfield in 2010. We are a long term partner
of the Falkland Islands Government ("FIG") and our aim has always been to
support the rights of the Falkland Islanders to develop their natural
resources.
Sea Lion project
The Company's core asset is a 35% non-operating interest in the Sea Lion oil
field located offshore to the north of the Falkland Islands. As the recent
NSAI report confirmed, the field holds highly material resources and is a
world class asset. The current plan is for the field to be developed in a
phased manner, with the first phase targeting 170 million barrels via an
FPSO. The second phase targets an additional 144 million barrels to be
developed through the same FPSO. Production is targeted to peak at 55,000
barrels per day. Subsequent phases are assumed to be developed via a
separate FPSO.
The financing plan for Phase 1 has a total capital requirement of US$1.658
billion from FID to first oil and US$2.058 billion from FID to project
completion. Of this, it is currently anticipated that approximately US$1
billion will come from a senior secured financing facility. The total
Rockhopper equity requirement, after the Navitas loans, assumed post first oil
project cash flows and an additional equity cost overrun contingency have been
taken into account, is US$102 million. In addition, the Falkland Islands
Government has previously indicated a requirement to provide for certain
project decommissioning liabilities as each pre first oil well is spudded.
Our share of these liabilities have been estimated to peak at US$40 million at
the time of first oil. These requirements are anticipated to be met through
the capital raise announced on 31 July 2025, with Rockhopper therefore being
fully funded for its Phase 1 equity funding requirements at FID. Based on
analysis in the senior debt financing documentation, and dependent upon oil
prices and field performance, it is currently envisaged that all subsequent
phases of Sea Lion could be self-financing once Phase 1 reaches project
completion. The previously disclosed Navitas loans do not cover Rockhopper
for any non-Phase 1 costs.
The independent resource evaluation carried out by NSAI (published on 3 June
2025) confirms the size of the opportunity at Sea Lion with an oil-only gross
2C of 917 million barrels (321 mmbbls net to Rockhopper) of which 727 million
barrels are development pending (255 mmbbls net to Rockhopper). NSAI has run
a series of economic valuations of those 255 million barrels, all of which are
net of all Falkland Government royalties and taxes. The NPV net to
Rockhopper of these barrels is confirmed by NSAI to be US$1.3bn at US$60
brent, US$1.8bn at US$70 brent and US$2.3bn at US$80 brent.
As disclosed in the Rockhopper Annual Report published on 5 June 2025,
Rockhopper is currently in discussions with the Falkland Islands Government to
resolve differences relating to a deferred tax liability arising from a
previously disclosed tax settlement deed as the current arrangements are
incompatible with the currently envisaged Phase 1 financing plan. Based on
discussions to date, the Company is hopeful that this matter will be resolved
in conjunction with the Sea Lion project moving ahead to FID.
Having carried out the capital raise, unless otherwise required, the Company
does not anticipate providing any more updates in relation to progress to FID
until the point of FID itself, which is targeted to take place in H2 2025 by
the Navitas (the "Operator").
Ombrina Mare
As announced on 3 June 2025, the Ombrina Mare Award was fully annulled by the
ad hoc Panel of the International Centre for Settlement of Investment Disputes
("ICSID"). Fortunately, the Company had put in place an insurance policy
(announced on 14 October 2024). As announced on 29 August 2025, that €31m
insurance has now been received in full.
The resubmission of a new request for arbitration was made in September and
the new funder continues to be responsible for all costs associated with
this. Given that the original arbitration took from 2016 to 2025 to be
resolved, Rockhopper does not anticipate this new process will have any impact
on the Sea Lion financing or its ability to take FID. 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.
Further announcements will be made in due course as and when appropriate.
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"), 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 FIG 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 now 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 FIG
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 expenditure reduced by approximately €500,000 - €750,000.
The transaction with Zodiac allows Rockhopper 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.
Environmental, Social and Governance ("ESG")
ESG and Corporate Responsibility continue to be a key focus for Rockhopper. As
an oil and gas exploration and production business, our role is to discover
and produce hydrocarbons in an environmentally responsible manner, supporting
energy requirements during the energy transition. As noted previously, FIG
established an independent environment trust to receive and administer future
off-setting payments from the Sea Lion project and distribute those funds for
activities aimed at ensuring a positive environmental legacy in the Falkland
Islands. Once FID on Sea Lion has been achieved, the Company commits to
defining measures, reporting transparently and mitigating our own emissions as
far as practicable.
Outlook
This has been an exceptionally busy period for your Company on a range of
fronts. As always, our focus has been on creating value for our stakeholders.
In that context, the capital raise referred to above was highly significant
and places your Company as close as we have ever been to being in a position
to take FID at our core asset Sea Lion, which the Operator is targeting by
year end. The independent NSAI report clearly sets out the very significant
value we are seeking to unlock on behalf of all of our stakeholders and the
Insurance Proceeds have contributed to our strongest balance sheet for a
number of years.
Whilst risks remain, we are more hopeful than ever of taking FID by the end of
2025.
FINANCIAL REVIEW
Results for the period
For the period ended 30 June 2025, the Group reported a loss after tax of
US$51.0 million (H1 2024: profit of US$69.5 million).
The Ombrina Mare Award Annulment
From a financial perspective the main event during the period was the
annulment of the Ombrina Mare Arbitration Award which was announced on 3 June
2025.
The accounting impact as at the period end is discussed in detail in note 2.
These numbers are material and some clearly involve a high level of judgement
and estimation uncertainty, as such we will continue to seek external
professional expert opinion in order to ensure robust and transparent
disclosure around these amounts.
After the period end the Group submitted its request for resubmission of the
dispute to arbitration.
Discontinued operations
In October 2024, the Group announced the disposal, subject to conditions
precedent, of its 100% interest in Rockhopper Civita Limited which holds the
Group's remaining operations in the Greater Mediterranean geographical
segment. The transaction had not completed at the period end, but the assets
and associated liabilities have been reclassified as held for sale on the
balance sheet. Due to the fact that the disposal group has been classified as
held for sale and represents a geographical area of operations it has also
been treated as a discontinued operation in line with IFRS 5. As such the
comparative information in the Income Statement and relevant notes have been
re-presented.
Operating activities
Administrative expenses ("G&A") for the period are US$2.6 million (H1
2024: US$1.4 million). This increase mainly relates to a US$1.0 million
increase in Employers National Insurance ("NI") costs. This has been caused by
a substantial increase in share price in the period, which in turn has led to
an increase in the NI provision for in the money employee share options.
The foreign exchange gain in the period is US$2.3 million (H1 2024: loss of
US$0.3 million). These mainly arise on GBP and Euro denominated cash and term
deposit balances in both the current and prior period.
Finance income in the period increased substantially due to the unwinding of
discount on the fair value of the Monetisation Agreement.
Finance expenses in the period of US$0.9 million (H1 2024: US$0.0 million)
relate mainly to interest charged on the Co-venturers loan from Navitas. As
part of the transaction to bring Navitas onto the licences, Navitas agreed to
provide loan funding to the Group to cover the majority of its share of Sea
Lion phase one related costs from Transaction completion, in September 2022,
up to FID with interest charged at 8% per annum (the "Pre-FID Loan"). Subject
to a positive FID, Navitas will provide a second interest free loan to fund
two-thirds of the Group's share of Sea Lion phase one development costs (for
any costs not met by third party debt financing).
Cash movements and capital expenditure
At 30 June 2025, the Group had cash and term deposits of US$21.7 million (31
December 2024: US$20.9 million).
Cash and term deposit movements during the period:
US$m
Opening cash and term deposit balance (31 December 2024) 20.9
Discontinued operations (0.3)
Falkland Islands (0.6)
Administrative expenses (2.6)
Proceeds of share issues 0.1
Miscellaneous 4.2
Closing cash and term deposit balance (30 June 2025) 21.7
Miscellaneous includes foreign exchange, interest and movements in working
capital during the period.
Oil and gas assets
The Sea Lion development remains central to the Group's plans and the
additions in the period of US$12.4 million relate to this project and
progressing it towards FID. The majority of these costs are covered through
the aforementioned Co-venturers loan from Navitas.
Taxation
The tax credit in the period principally relates to deferred tax credit in
relation to the change in fair value of the Monetisation Agreement offset by
an increase in the non current tax payable estimate of amounts owed to the
Falkland Islands arising on historic farmouts. The non current tax payable is
discussed in more detail in note 3.
Liquidity, counterparty risk and going concern
The Group monitors its cash position, cash forecasts and liquidity on a
regular basis and takes a conservative approach to cash management.
At 30 June 2025, the Group had cash resources of US$21.7 million.
Historically, the Group's largest annual expenditure has related to
pre-sanction costs associated with the Sea Lion development. The Group
benefits from loan funding for its share of all Sea Lion pre-sanction costs
(other than licence fees and taxes). The cash balance does not reflect a
further €31 million of insurance proceeds which was received in August 2025.
In forming this judgement the Directors have not taken into account any post
sanction Sea Lion costs. The Directors expect that the proceeds of the
recently announced placing to be sufficient to take FID in respect of the
phase 1 Sea Lion Development, subject to securing the Senior debt facility of
US$350 million net to the Group. Ultimately from a going concern perspective,
project sanction is a discretionary act and if for some currently non
envisaged reason it was deemed that insufficient funding was in place then the
Directors would not sanction the project.
The Group has prepared the financial statements on the basis that it will
continue to operate as a going concern. The Directors consider that there are
no material uncertainties that may cast significant doubt over this
assumption. They have formed a judgement that there is a reasonable
expectation that the Group has adequate resources to continue in operational
existence for the foreseeable future, and not less than 12 months from the
signing of this interim report.
Principal risk and uncertainties
A detailed review of the potential risks and uncertainties which could impact
the Group are outlined in the Strategic Report of the Group's annual
consolidated financial statements. These included , inter alia, sufficiency of
funding to develop the Sea Lion Project, disputes in respect of the
sovereignty of Falkland Islands, joint venture alignment, changes to the
fiscal regime and regulatory requirements, volatility in commodity prices and
health, safety, environment and security risks.
Subsequent to the period end the Company, as part of its conditional placing
and Open Offer to raise funds for the Sea Lion project issued a circular. Part
2 of the circular highlighted various risk factors. The circular is available
on the Company's website www.rockhopperexploration.co.uk.
CONDENSED CONSOLIDATED income statement
for the six months ended 30 June 2025
30 June 30 June
2025 2024
Unaudited Unaudited
*Restated
Notes $'000 $'000
Administrative expenses (2,595) (1,444)
Charge for share based payments - (40)
Foreign exchange movement 2,251 (279)
Results from operating activities (344) (1,763)
Other income 2 (46,399) 79,802
Other expenses 2 (5,278) -
Finance income 1,515 173
Finance expense (863) (47)
(Loss)/Profit before tax (51,369) 78,165
Tax 3 650 (8,163)
(Loss)/profit from continuing operations (50,719) 70,002
Loss for the year from discontinued operations (275) (537)
(Loss)/PROFIT attributable to the equity shareholders of the parent company (50,994) 69,465
(Loss)/profit per share attributable to the equity shareholders of the parent
company: cents
Basic 4 (7.92) 10.80
Diluted 4 (7.92) 10.67
Basic (continuing operations) 4 (7.88) 10.88
Diluted(continuing operations) 4 (7.88) 10.75
* The comparative information has been restated see note 1.4.
CONDENSED CONSOLIDATED statement of comprehensive income
for the six months ended 30 June 2025
Six months Six months
Ended Ended
30 June 30 June
2025 2024
Unaudited Unaudited
*Restated
Notes $'000 $'000
(Loss)/profit for the period (50,994) 69,465
Exchange differences on translation of foreign operations 2,890 468
TOTAL COMPREHENSIVE (LOSS)/PROFIT FOR THE period (48,104) 69,933
CONDENSED CONSOLIDATED balance sheet
as at 30 June 2025
As at As at
30 June 31 December
2025 2024
Unaudited Audited
Notes $'000 $'000
NON CURRENT Assets
Exploration and evaluation assets 5 283,509 271,110
Property, plant and equipment 2 10
Other receivables 2 14,110 -
CURRENT Assets
Other receivables 2 35,473 62,330
Term deposits 20,387 19,969
Cash and cash equivalents 1,269 915
Assets classified as held for sale 1,923 1,203
Total assets 356,673 355,537
CURRENT Liabilities
Other payables 9,788 6,516
Tax payable 3 2,042 1,806
Liabilities associated with assets held for sale 16,663 14,279
NON-CURRENT Liabilities
Insurance liability 2 31,060 -
Co-venturers loan 5 27,576 15,354
Tax payable 3 24,888 22,300
Provisions 1,640 1,600
Deferred tax liability 42,637 45,305
Total liabilities 156,294 107,160
Equity
Share capital 9,516 9,455
Share premium 12,674 12,585
Share based remuneration 1,927 2,185
Owns shares held in trust (332) (1,320)
Merger reserve 78,208 78,208
Foreign currency translation reserve (7,705) (10,595)
Special reserve 175,281 175,281
Retained losses (69,190) (17,422)
Attributable to the equity shareholders of the company 200,379 248,377
Total liabilities and equity 356,673 355,537
These condensed consolidated interim financial statements were approved by the
directors and authorised for issue on 28 September 2025 and are signed on
their behalf by:
Samuel Moody
Chief Executive Officer
UNAUDITED CONDENSED CONSOLIDATED statement of changes in equity
for the six months ended 30 June 2025
Foreign
Shares currency
Share Share Share based held Merger translation Special Retained Total
capital Premium remuneration in trust reserve reserve reserve losses Equity
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance at 31 December 2024 9,455 12,585 2,185 (1,320) 78,208 (10,595) 175,281 (17,422) 248,377
Loss for the period - - - - - - - (50,994) (50,994)
Other comprehensive profit for the year - - - - - 2,890 - - 2,890
Total comprehensive loss for the year
- - - - - 2,890 - (50,994) (48,104)
Shares issues (net of expenses) 61 89 - (44) - - - - 106
Other transfers - - (258) 1,032 - - - (774) -
Balance at 30 June 2025 9,516 12,674 1,927 (332) 78,208 (7,705) 175,281 (69,190) 200,379
for the six months ended 30 June 2024
Foreign
Shares currency
Share Share Share based held Merger translation Special Retained Total
capital Premium remuneration in trust reserve reserve reserve Gains/ (losses)* Equity
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance at 31 December 2023 9,196 10,181 2,109 (1,320) 78,208 (8,501) 175,281 (65,034) 200,120
Profit for the period - - - - - - - 69,465 69,465
Other comprehensive profit for the year - - - - - 468 - - 468
Total comprehensive profit for the year
- - - - - 468 - 69,465 69,933
Shares issues (net of expenses) 259 2,404 - - - - - - 2,663
Share based payments - - 40 - - - - - 40
Other transfers - - - - - - - - -
Balance at 30 June 2024 9,455 12,585 2,149 (1,320) 78,208 (8,033) 175,281 4,431 272,756
* Restated - see note 1.4
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2025
Six months Six months
Ended Ended
30 June 30 June
2025 2024
Unaudited Unaudited
Notes $'000 $'000
Cash flows from operating activities
(Loss)/profit for the year (50,994) 16,500
Adjustments to reconcile net losses to cash:
Depreciation of property, plant and equipment 8 8
Share based payment charge - 40
Finance expense 1,055 195
Finance income (1,322) -
Foreign exchange (4,576) (111)
Income tax expense (650) 1,882
Operating cash flows before movements in working capital (56,479) 18,514
Changes in:
Decrease in receivables 21,440 267
Increase/(decrease) in payables 34,441 (502)
Increase/(decrease) in provisions - -
Utilized by operating activities (598) 18,279
Cash Flows from investing activities
Capitalised expenditure on exploration and evaluation assets (827) (766)
Investing activities before movements in capital balances (827) (766)
Changes in:
Change in cash classified as held for sale (17) -
Term deposits 1,686 (2,532)
Cash flow from/(used in) investing activities 842 (3,298)
Cash flows from financing activities
Proceeds of share issues 106 -
Exercise of warrants - 2,109
Net lease payments - (11)
Cash flow from financing activities 106 2,098
Exchange gain/loss on cash and cash equivalents 4 276
Net cash flow 350 17,079
Cash and cash equivalents brought forward 915 3,487
Cash and cash equivalents carried forward 1,269 20,842
Notes to the condensed CONSOLIDATED group financial statements
for the six months ended 30 June 2025
1 Accounting policies
1.1 Group and its operations
Rockhopper Exploration plc ("the Company"), a public limited company quoted on
AIM, incorporated and domiciled in the United Kingdom ("UK"), together with
its subsidiaries (collectively, the "Group") holds interests in the Falkland
Islands and the Greater Mediterranean. The Company's registered office address
is Warner House, 123 Castle Street, Salisbury, SP1 3TB.
The interim condensed consolidated financial statements for the six months
ended 30 June 2025 were authorised for issue in accordance with a resolution
of the Directors on 28 September 2025.
1.2 Statement of compliance and basis of preparation
The interim financial information has been prepared using the accounting
policies which were applied in the Group's statutory financial statements for
the year ended 31 December 2024. The Group has not adopted IAS 34: Interim
Financial Reporting in the preparation of the interim financial statements.
The information as at 31 December 2024 has been extracted from the audited
financial statements of Rockhopper Exploration plc for the year ended 31
December 2024. The annual consolidated financial statements of the Group for
the year ended 31 December 2024 were prepared in accordance with UK adopted
International Accounting Standards in conformity with the requirements of the
Companies Act 2006. These interim condensed consolidated financial statements
do not constitute statutory financial statements under the Companies Act 2006.
The information for the year ended 31 December 2024 shown in this report does
not constitute statutory accounts for that year as defined in section 434 of
the Companies Act 2006. A copy of the statutory accounts for that year has
been delivered to the Registrar of Companies. The auditor has reported on
those accounts. Their report was unqualified, did not draw attention to any
matters by way of an emphasis of matter and did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006.
There has been no impact on the Group of any new standards, amendments or
interpretations that have become effective in the period. The Group has not
early adopted any new standards, amendments or interpretations.
1.3 Going concern
The Group has prepared the financial statements on the basis that it will
continue to operate as a going concern. The Directors consider that there are
no material uncertainties that may cast significant doubt over this
assumption.
In forming this judgement the Directors have not taken into account any post
sanction Sea Lion costs. The Directors expect that the proceeds of the
recently announced placing to be sufficient to take FID in respect of the
phase 1 Sea Lion Development. Ultimately, from a going concern perspective,
project sanction is a discretionary act and if for some currently non
envisaged reason it was deemed that insufficient funding was in place then the
Directors would not sanction the project.
Therefore the Directors have formed a judgement that there is a reasonable
expectation that the Group has adequate resources to continue in operational
existence for the foreseeable future, and not less than 12 months from the
date of this interim report.
1.4 Restatement of comparative balances
In October 2024, the Group announced the disposal, subject to conditions
precedent, of its 100% interest in Rockhopper Civita Limited which holds the
Group's remaining operations in the Greater Mediterranean geographical segment
("the disposal group"). The transaction had not completed as at 30 June 2025,
but the assets and associated liabilities have been reclassified as held for
sale on the balance sheet.
Due to the fact that the disposal group has been classified as held for sale
and represents a geographical area of operations it has also been treated as a
discontinued operation in line with IFRS 5. As such the comparative
information in the Income Statement and relevant notes has been re-presented.
Additionally at 31 December 2024, after discussion with our auditors Tranche 2
and Tranche 3 contingent payments under the Monetisation Agreement (see note
2) were reclassified as financial instruments under IFRS 9 and as such fair
valued on initial recognition and subsequently through profit and loss. The
prior year comparative information for the six months to 30 June 2024 has been
restated to recognise the full fair value.
1.5 Period end exchange rates
The period end rates of exchange actually used were:
30 June 2025 30 June 2024 31 December 2024
£ : US$ 1.37 1.26 1.25
€ : US$ 1.17 1.07 1.04
1.6 Judgements and estimates
The key areas identified that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities are consistent
with those identified in note 2 of the consolidated financial statements for
the year ended 31 December 2024 with the addition of Insurance liability,
which is discussed below in note 2. The judgements applied in the period ended
30 June 2025 are also consistent with those made at 31 December 2024 with the
exception of the fair value of the Monetisation Agreement, following the
annulment of the Arbitration Award in June 2025. This is also discussed in
note 2 below.
2 Monetisation agreement and Insurance proceeds
Background:
In August 2022, pursuant to an ICSID arbitration against the Italian Republic,
which commenced in 2017, Rockhopper was awarded approximately €190 million
plus interest and costs following a unanimous decision by the ICSID appointed
arbitral Tribunal that Italy had breached its obligations under the Energy
Charter Treaty (the "Award").
Rockhopper submitted a letter to the Italian Republic in September 2022
formally requesting payment of €247 million, representing the Award amount
plus accrued interest from 29 January 2016 to 23 August 2022 and costs.
Following Italy's request on 28 October 2022 to seek annulment of the Award,
an ad hoc Committee was constituted to hear relevant arguments and ultimately
make a ruling on Italy's request to annul the Award.
On 20 December 2023, Rockhopper announced its entry into a funded
participation agreement (the "Monetisation Agreement") with a regulated
specialist fund that has experience in investing in legal assets (the
"Specialist Fund") to monetise its Award.
Under the terms of the Monetisation Agreement, the Specialist Fund agreed to
make cash payments to Rockhopper in up to three tranches:
· Tranche 1 - Rockhopper retain €19 million of an upfront payment of
€45million on completion. As previously disclosed, Rockhopper entered into a
litigation funding agreement in 2017 under which all costs relating to the
Arbitration from commencement to the rendering of the Award were paid on its
behalf by a separate specialist arbitration funder (the "Original Arbitration
Funder"). That agreement entitled the Original Arbitration Funder to a
proportion of any proceeds from the Award or any monetisation of the Award.
The Original Arbitration Funder was paid €26 million of the Tranche 1
proceeds to discharge all of Rockhopper's liabilities under the agreement with
the Original Arbitration Funder.
· Tranche 2 - Additional contingent payment of €65 million upon a
successful annulment outcome. Should the Award be partially annulled and the
quantum reduced as a result, then Tranche 2 will be reduced such that the
amounts under Tranche 1 and Tranche 2 shall be adjusted downward on a pro-rata
basis. For example, if the quantum of the Award is reduced by 20%, then the
amounts under Tranche 1 and Tranche 2 shall be reduced by 20%. For the
avoidance of doubt, the amounts under Tranche 1 and Tranche 2 shall not reduce
below €45m in any circumstance.
· Tranche 3 - Potential payment of 20% on recovery of amounts in
excess of 200% of the Specialist Fund's total investment including costs.
In June 2024 the precedent conditions were satisfied and Rockhopper received
its initial consideration of €19 million. Management determined that the
Monetisation Agreement is a financial instrument within the scope of IFRS 9
and as such should be fair valued on initial recognition and subsequently
through profit and loss. This led to a US$58.2 million current receivable in
the balance sheet as at 31 December 2024.
In October 2024 the Group decided, in line with normal market practice, that
insuring to protect shareholders against loss resulting from an annulment of
the Award to be the most prudent course of action. The insurance arrangements
(the "Insurance") ensured that in the event that the Italian Republic
succeeded in having the entire Award annulled or in the event of partial
annulment, the combination of the Tranche 2 payment and the insurance payout
shall entitle Rockhopper to a total no less than €31 million. The total cost
of the Insurance, which including applicable taxes and underwriting fees, is
€4 million.
In June 2025 it was announced that Italy had been successful in its attempts
to annul the Award (the "Annulment"). Under the terms of the Monetisation
Agreement the Tranche 2 payment will now be €nil. As such the Group
submitted claims and statements of loss under the terms of the Insurance. The
lead insurer has confirmed that the loss has been triggered and, as a result,
Rockhopper recognised a receivable in June 2025 for the full €31 million
amount ("Insurance Proceeds") to which it is entitled under the Insurance. The
money was received in August 2025 in line with terms of the Insurance.
Under the terms of the Insurance to the extent that Rockhopper makes any
future financial recovery from any new arbitration ("Recovered Amounts"),
through the Monetisation Agreement or otherwise, after deductions for any
reasonable costs and expenses incurred, that recovery will be utilised to
reimburse the insurers ("Insurance Liability") in respect of the Insurance
Proceeds.
A new request for arbitration was submitted in September 2025. Under the terms
of the Monetisation Agreement the costs of contesting the new request for
arbitration are borne by the new funder.
Fair value of the monetisation agreement
Even though the claim now has been resubmitted, the Monetisation Agreement
anticipated this event and includes future economic flows to the Group arising
from the past event. Given some or all of the future proceeds of the
Monetisation Agreement will be passed through to insurers Management have
considered whether the derecognition criteria IFRS 9 have been met and
concluded they have not. The derecognition criteria have to be applied to the
whole Monetisation Agreement as neither a part or pro rata part of a
specifically identified cash flow can be identified. As noted there is a pass
through obligation but Rockhopper has maintained a potential subordinated
retained interest and control of the Monetisation Agreement.
As a result, Management's judgement is to continue to recognise the fair value
of the Monetisation Agreement as at 30 June 2025.
In the period the fair value of the Monetisation Agreement reduced from
US$59,246k to US$14,110k resulting in an overall loss through a combination of
changes in fair value and foreign exchange of $45,136k recognised in the
income statement.
In estimating the fair value of the monetisation agreement management has made
the following judgements and estimates:
- As Rockhopper is not due any amounts for Tranche 2 under the
Monetisation Agreement the fair value of Tranche 2 is now US$nil.
- The fair value of Tranche 3 has now increased as its fair value is
linked to the costs incurred by the Specialist Fund which has now been reduced
as they will no longer have to make a payment for Tranche 2 to Rockhopper.
This increases the likelihood that if a future arbitration finds in
Rockhopper's favour the award recovery will be in excess of 200% of the
Specialist Funds costs.
- The fair value of Tranche 3 has been estimated on the basis of
probability weighted expected cash flows. This is inherently subjective and
includes judgements on amongst other things, the chance of success in the
resubmitted arbitration, the expected value of any recovered amounts under any
new award, the cost of achieving those recoveries as well as the time taken to
achieve any recovery.
Insurance receivable, liability and costs
Following the Annulment €31 million has been recognised as a receivable at
30 June 2025, which was subsequently received in August 2025.
An insurance liability has also been recognised representing the expected pass
through of the proceeds of Tranche 3, capped at a maximum of €31 million.
The cost of the Insurance was being spread over the life of the policy (which
materially exceeded the expected time to receive an outcome from the Award
annulment). As such the majority of this cost was recorded as a prepayment as
at 31 December 2024. Given the claim on the Insurance, during the period, the
US$3.9 million balance of this prepayment has been recognised in Other
Expenses in the period.
Summary financial information
The impact in the financial statements of the above is as set out below
Balance sheet
30 June 2025 31 December 2024 30 June 2024
Unaudited Audited Unaudited
$'000 $'000 $'000
Monetisation asset 14,110 58,228
Insurance receivable 35,179 - -
Insurance prepayment - 3,906 -
Insurance liability 31,060 - -
Income statement
Six months ended Year ended Six months ended
30 June 2025 31 December 2024 30 June 2024
Unaudited Audited Unaudited
$'000 $'000 $'000
Gain / (loss) on fair value of the monetisation asset (50,518) 79,802 79,802
Net Insurance income 4,119 - -
Insurance cost 3,906 232 -
3 Tax payable
Six months ended Six months ended
30 June 30 June
2025 2024
$'000 $'000
Unaudited Unaudited
Current tax payable 2,042 1,882
Non current tax payable 24,888 -
26,930 1,882
Current tax payable of US$2.0 million relates to tax arising in the prior year
on the Tranche 1 proceeds of the Monetisation, which was paid post period end
as well as an estimate of the tax due on the Insurance proceeds as disclosed
in Note 2. Non-current tax payable of US$24.9 million relates to the potential
liability arising from the historic farm-outs in the Falkland Islands.
On the 8 April 2015, the Group agreed binding documentation ("Tax Settlement
Deed") with FIG in relation to the tax arising from the Group's 2012 farm out.
The Tax Settlement Deed confirms the quantum and deferment of the outstanding
tax liability and is made under Extra Statutory Concession 16. The Tax
Settlement Deed also states that the Group is entitled to make adjustment to
the outstanding tax liability if and to the extent that the Commissioner is
satisfied that any part of the Development Carry becomes irrecoverable.
In September 2022 the transaction enabling Harbour Energy plc to exit and
Navitas to enter the North Falkland Basin completed. Under the transaction the
balance of Development Carry became irrecoverable.
Following the transaction professional advice (the "Advice") was sought over
whether the Group was entitled to adjust the tax returns for the irrecoverable
Development Carry. The Advice confirmed that it is probable that the Group is
entitled to adjust the outstanding tax liability. As such the Group submitted
tax returns on this basis. FIG disagreed with this analysis and asserted that
the Group continued to owe £59.6 million payable around first oil.
Based on the information as at 31 December 2023 the Directors made a judgement
to derecognise any liability, given that it was considered the most probable
outcome based on the Advice.
Separately the Group submitted tax returns in relation to the farm out to
Navitas that occurred immediately after their acquisition, from Harbour Energy
plc of the company that holds the North Falkland's Basin licences. The
consideration for this transaction was the provision of loan funding to the
Group to cover the majority of its share of Sea Lion phase 1 related costs
from transaction completion up to FID through a loan from Navitas with
interest charged at 8% per annum (the "Pre-FID Loan"). Subject to a positive
FID, Navitas will provide an interest free loan to fund two-thirds of the
Group's share of Sea Lion phase 1 development costs (for any costs not met by
third party debt financing). The Directors are confident that the Group has
sufficient losses to ensure no tax liability will arise.
The Group has continued discussions with FIG to resolve differences regarding
any outstanding tax liability arising from the Tax Settlement Deed and
recognise that the arrangements make the project financing for Sea Lion
significantly more difficult.
Given these discussions, and notwithstanding the Advice, the level of
uncertainty relating to the potential tax liability has increased. For this
reason, the Directors' recognised a US$22.3 million liability as at 31
December 2024, which has been determined with reference to a probability
weighting approach to reflect the additional uncertainty. This provision was
reviewed and increased as at the period end to US$24.9 million, this change
reflecting mainly the effects of discounting and foreign exchange in a number
of the possible outcomes. For the avoidance of doubt there is no agreement to
date with FIG and the ultimate tax liability could be materially different.
Should it be proven that there is no entitlement to adjustment under the Tax
Settlement Deed then the outstanding tax liability would be £59.6 million and
still payable on the earlier of: (i) the first royalty payment date on Sea
Lion; (ii) the date of which Rockhopper disposes of all or a substantial part
of the Group's remaining licence interests in the North Falkland Basin; or
(iii) a change of control of Rockhopper Exploration plc.
4 Basic and diluted loss per share
Six months Six months
ended ended
30 June 30 June
2025 2024
Number Number
Unaudited Unaudited
Shares in issue brought forward 640,578,764 620,229,436
Shares issued
- Issued 4,635,001 20,349,328
Shares in issue carried forward 645,578,764 640,578,764
Weighted average:
Ordinary shares 645,980,317 644,485,599
Shares held in Employee Benefit Trust (1,959,286) (1,304,500)
Weighted average number of Ordinary Shares for the purposes of basic earnings 644,021,030 643,181,099
per share
Effects of
Share options - 8,058,678
Weighted average number of Ordinary Shares for the purposes of diluted
earnings per share
644,021,030 651,239,777
Continuing operations Discontinued operations Total Continuing operations Discontinued operations Total
2025 2025 2025 2024 2024 2024
$'000 $'000 $'000 $'000 $'000 $'000
Net (loss)/profit after tax for purposes of basic and diluted earnings per (50,719) (275) (50,994) 70,002 (537) 69,465
share
The weighted average number of Ordinary Shares is greater than the Shares in
issue because it takes into account those employee options which have vested
and have a nil exercise cost ("LTIPs") as in substance these are similar to a
vested ordinary share, and the entity will receive no further substantive
consideration when the option is exercised. It also takes into account those
shares which are treated as own shares held in trust. As at the period end the
Group had 3,042,001 Ordinary shares held in an Employee Benefit Trust which
will be used to settle future exercises of LTIPs.
Shares issued in the period relate to either the exercise of employee options
or shares issued to the Employee Benefit Trust for the future exercise of
LTIPs.
As the Group is reporting a loss in the period then in accordance with IAS33
the share options are not considered dilutive because the exercise of the
share options would have the effect of reducing the loss per share.
At the period end, the Group had the following unexercised options in issue.
Six months
ended
Weighted 30 June
Average 2025
Exercise Number
Price Unaudited
Vested:
Long term incentive plan Nil 3,042,001
Share options 4.8 pence 19,358,889
Unvested
Share options 7.0 pence 4,500,000
5 Intangible exploration and evaluation assets
During the period there were US$12.4 million (2024: US$9.2 million) of
additions. These mainly relate to the Sea Lion Development as does the balance
carried forward.
The Group benefits from funding to cover the majority of its share of Sea Lion
phase 1 related costs up to FID through a loan from Navitas with interest
charged at 8% per annum (the "Pre-FID Loan"). Subject to a positive FID,
Navitas will provide an interest free loan to fund two-thirds of the Group's
share of Sea Lion phase 1 development costs (for any costs not met by third
party debt financing). The majority of the additions in the period are covered
through the Pre-FID Loan, which totaled US$27.6 million at 30 June 2025 (31
December 2024: US$15.4 million)
At 30 June 2025, Management reviewed its intangible exploration/appraisal
assets for indicators of impairment, with no indicators of impairment being
identified. No impairment tests were therefore performed.
Specifically, Management noted that the proceeds of the recently announced
placing should be sufficient to take FID in respect of the phase 1 Sea Lion
Development. If for some currently non envisaged reason it was deemed
insufficient funding at the point of FID, Management believe that additional
funding would be available.
Ultimately should any required additional funding not be available then it
would not be possible to sanction the Sea Lion phase 1 development. This would
possibly lead to the carrying value of the intangible asset not being
recovered.
6 Post balance sheet events
The Group announced it had received firm commitments to raise up to
approximately US$140 million (approximately £105 million), before expenses,
by way of a conditional placing of up to 198,207,354 new Ordinary Shares and
49,551,833 Underwriting Warrants at an issue price of 53 pence (the "Issue
Price") comprising:
· a firm placing of 162,813,189 Firm Placing Shares and 40,703,294 Firm
Underwriting Warrants to raise approximately US$115 million at the Issue
Price, conditional upon inter alia the occurrence of a final investment
decision in relation to Phase 1 of the development plan for the Company's Sea
Lion field, to be effected using the authorities to issue and allot new shares
granted to the Directors by Shareholders at the Company's annual general
meeting held on 27 June 2025 (the "Firm Placing"); and
· a conditional placing of 35,394,165 Conditional Placing Shares and
8,848,539 Conditional Underwriting Warrants to raise approximately US$25
million at the Issue Price, conditional upon inter alia the passing of the
Resolutions at a general meeting of the Company (the "General Meeting") and
the occurrence of a final investment decision in relation to Phase 1 of the
development plan for the Company's Sea Lion field (the "Conditional Placing"
and, together with the Firm Placing, the "Placing").
Pursuant to the firm and conditional tranches of the Placing, each Placee will
receive one Underwriting Warrant for every 4 Placing Shares subscribed for at
the Issue Price upon completion of the Placing. Each Underwriting Warrant will
give the holder the right to subscribe for one new Ordinary Share at a price
of 80 pence per Ordinary Share (the "Strike Price") at any time from the issue
of the Underwriting Warrants up to (and including) 5.00 p.m. on the fourth
anniversary of Admission (the "Warrant Exercise Period"). Members of the
public were not entitled to participate in the Placing. The Placees include a
combination of new Israeli based institutional investors as well as larger
existing shareholders.
The Company considers it important that existing Shareholders who did not
participate in the Placing are given an opportunity to acquire new Ordinary
Shares at 53 pence. The Company therefore confirms its intention to provide
existing Shareholders with the opportunity to subscribe for new Ordinary
Shares at 53 pence pursuant to an Open Offer to be announced on or around the
date of Admission, which is currently expected to occur by the end of 2025.
Pursuant to the Open Offer, the Company will seek to raise gross proceeds of
up to €8 million (approximately US$9.2 million).
The making of the Open Offer was conditional upon the approval by Shareholders
at the General Meeting.
The General Meeting was held on 16 September 2025 and all the necessary
approvals were given for the Conditional Placing and the Open Offer. As such
they are now only conditional on FID.
The net proceeds of the Placing and Open Offer are expected to fund
Rockhopper's proportion of the capex required for the Phase 1 development plan
for the Sea Lion oil field in the North Falklands Basin ("Sea Lion"). The
Phase 1 scope is over the northern development area of Sea Lion and is
designed to recover 170 mmbbls of gross 2C resource through the drilling of
seven oil producer wells, one gas injector and three water injector wells
("Phase 1 of the Sea Lion Development" or "Phase 1").
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