REG - Rockhopper Exp plc - Final Results
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RNS Number : 7341G Rockhopper Exploration plc 03 June 2026
3 June 2026
Rockhopper Exploration plc
("Rockhopper" or the "Company")
Full Year Results for the Year Ended 31 December 2025
Rockhopper Exploration plc (AIM: RKH), the oil and gas company with key
interests in the North Falkland Basin, is pleased to announce its audited
results for the year ended 31 December 2025.
2025 AND POST PERIOD HIGHLIGHTS
· Sea Lion Phase 1 sanctioned
· Rockhopper funded for Phase 1
· First oil targeted Q1 2028
· 110 mmbbls 2P reserves net to Rockhopper
· 211 mmbbls 2C resources net to Rockhopper
Sea Lion Development
Project
· Development of Phase 1 of the Sea Lion field - offshore to the north
of the Falkland Islands - sanctioned
· Debt Financing in place consisting of US$1.0 billion of senior debt,
of which US$350 million is Rockhopper debt
· Equity raises completed to fund the development of Phase 1 of Sea
Lion
o Placings raising US$142 million
o Significantly oversubscribed open offer raising a further US$9.2 million
· Key project commercial contracts in place including, but not limited
to:
o FPSO charter
o Drilling rig
o Drilling and completion services
· Notice was served on the FPSO in the UK to disconnect, with the
vessel having left its previous production location, ahead of a period of
refurbishment work prior to deployment at Sea Lion
· Phase 1 FPSO work moved from the Middle East to Asia
· Target for First Oil remains Q1 2028 following a Final Investment
Decision on Phase 1 in December 2025
· JV investigating the possibility of accelerating development of
subsequent phases
· MOU signed for second larger FPSO with production capacity of
approximately 125,000 barrels per day
Reserves and Resources
· Updated independent technical report (RKH working interest):
o 110 mmbbls 2P reserves comprising 57.9 mmbbls associated with Phase 1
(Reserves under development) and 51.9 mmbbls associated with Phase 2 (Reserves
planned for development)
o 211 mmbbls 2C resources
o Significant upside potential
Corporate and Financial
· Cash and term deposits balance at 31 December 2025 of US$179 million*
(31 December 2024: US$20.9 million)
Ombrina Mare Arbitration
· Ombrina Mare Arbitration Award (the "Award") annulled
· Receipt of €31 million under terms of the insurance policy in
respect of the Award
· A new request for arbitration was made in September 2025, with the
new funder responsible for all associated costs
* Includes US$8 million classified as held for sales
Sam Moody, Chief Executive Officer of Rockhopper, commented:
"This has been a transformative period for Rockhopper as the Sea Lion project
moves into full development phase following its financing and sanction late in
2025. We look forward to continuing our very constructive working relationship
with operator Navitas in the coming months as we further progress the project.
We remain hugely grateful for shareholders' continuing support and look
forward to updating them on Sea Lion in due course."
Enquiries:
Rockhopper Exploration plc
Sam Moody - Chief Executive Officer
Tel. +44 (0)20 7390 0230 (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
Lucy Williams (BSc Geology, MSc Petroleum Geology, Chartered Geologist), the
Company's Geoscience Manager, has reviewed and approved the technical
information contained within this announcement.
Notes to Editors
Rockhopper Exploration plc is a UK-based oil and gas exploration and
production company with key interests in the Falkland Islands. The Company
holds a 35 per cent interest in licences in the North Falkland Basin, where it
has sanctioned the development of the significant Sea Lion field, originally
discovered by the Company in 2010.
Rockhopper's shares are quoted on the AIM market of the London Stock Exchange
under the ticker RKH.
For more information, visit the Company's website at
www.rockhopperexploration.co.uk (http://www.rockhopperexploration.co.uk) .
Note regarding financial information disclosure
The financial information set out below does not constitute the Group's
statutory accounts for the year ended 31 December 2025 but is derived from
those accounts. References within the document may refer to information in the
statutory accounts and these will be sent to shareholders and published on the
Company's website imminently.
Chair and CEO Review
Sea Lion
Financing and FID
The period under review saw Rockhopper sanction Phase 1 of the Sea Lion
Project (the "Project"), the single most important milestone we have achieved
since completing our appraisal campaign in January 2012. Partner and Operator,
Navitas Petroleum Development and Production Limited ("Navitas") has also
taken final investment decision ("FID") relating to the Project.
Following the announcement of conditional equity placings to fund Rockhopper's
project equity requirement in July 2025, a full project financing was put in
place and, having received all necessary approvals and consents, FID for Phase
1 of the Sea Lion Project was announced on 10 December 2025, with Financial
Close shortly after on 22 December 2025. The financing was completed on 31
December 2025 with the conditional placings raising approximately US$142
million before expenses through the issue of 201,102,976 new ordinary shares
at an issue price of 53p (the "Placing"). In addition, 50,275,732 underwriting
warrants were issued giving the holder the right to subscribe for one new
ordinary share at a strike price of 80p per share.
An open offer was concluded in January 2026 in order to give existing
shareholders the opportunity to participate in the equity raise at the same 53
pence per share level as the Placing (the "Open Offer"). This Open Offer,
which was 7.8x over subscribed, raised an additional US$9.2 million before
expenses through the issue of 13,188,036 Open Offer shares.
The project financing consists of US$1.0 billion of senior debt (of which
US$350 million is Rockhopper debt) with the balance being provided via a
combination of joint venture equity and post first oil cash flows.
Rockhopper benefits from previously disclosed financing loans from Navitas in
relation to the Project (with the loan balance at YE2025 at US$52.5 million)
and, as a result, the net Rockhopper equity requirement was confirmed at
US$102 million, in addition to the previously disclosed Rockhopper share of a
5% equity overrun support which is approximately US$10 million (therefore in
aggregate US$112 million).
Additional costs of US$5.25 million net to Rockhopper arose as a result of a
change in location for the work required to be undertaken on the FPSO, as
detailed in the FPSO section below. Taking into account this additional equity
requirement, Rockhopper remains funded for Phase 1 of the development.
The Rockhopper senior debt facility will be for US$350 million with a tenor of
7 years. First drawdown shall not be permitted until the agreed equity amount
has been distributed into the Sea Lion Project. Semi-annual straight-line
amortisations commence on 31 March 2029. The margin is SOFR + 525bps during
the pre-completion period, moving to 425bps in years 1 and 2 post project
completion, 450bps during year 3 post completion and 475bps thereafter.
Mandatory hedging of 50% PDP 1 (#_ftn1) is required during year 1 post
project completion, 33.3% in year 2 and 25% in year 3. A commitment fee of
30% of margin on available undrawn is payable semi-annually. The senior debt
facility contains other representations, covenants and default provisions that
are customary for a facility of this nature.
An additional financial requirement has been placed on the joint venture
("JV") developing Sea Lion - comprising Navitas and Rockhopper - to cover the
eventuality that the project fails without producing sufficient cash flow for
the JV and its funders to continue work. This Early Project Failure
requirement is currently estimated at US$52.5 million net to Rockhopper. We
are currently investigating the possibility of covering this via a combination
of surety bond, parent company guarantees, cash or any other suitable
instrument. Whilst the total net cost to Rockhopper remains uncertain, the
Board believes it is unlikely to exceed US$52.5 million.
Navitas has confirmed it is advancing alternatives to accelerate the
development plan for the further resources in the oil asset that are not
included in the development plan, whereby production under subsequent
development phases may be executed in combination with other production
facilities.
As part of the acceleration alternatives, Navitas has entered into a
non-binding memorandum of understanding ("MOU") during May 2026 for the
acquisition of an additional FPSO with a production capacity of approximately
125,000 barrels per day, which may serve the future development phases of the
Project. The completion of the transaction is subject to, inter alia, the
completion of due diligence, negotiations, and the signing of binding
agreements, as well as the fulfillment of customary conditions precedent. It
should be noted that there is no certainty that the transaction will be
completed.
Resources and Reserves
Following the sanction of Phase 1 of the Sea Lion Project, Rockhopper
commissioned and published an updated independent reserves and resources
evaluation conducted by Netherland Sewell and Associates ("NSAI") (the
"Report").
Importantly, the Report has reclassified volumes contained in the Sea Lion
Field Northern Development Area ("NDA") Phases 1 and 2 from the Contingent
Resources classification to the Reserves classification. This reclassification
has been possible following the Company's FID on the Sea Lion field, made in
December 2025. Phase 2 of the Sea Lion development is expected to be financed
from cashflow generated by Phase 1. Later phases of the Sea Lion development
have remained within the Contingent Resources category.
Reserves
Summary of Gross and Working Interest Net Recoverable Reserves and Future Net
Revenue attributable to Sea Lion Field NDA Phases 1 and 2
Rockhopper holds a 35 per cent working interest in the Sea Lion field.
Oil (MBBL) Gross (100%) Oil (MBBL) Working Interest (35%) Future Net Revenue Working Interest (35%) (US$000) Undiscounted Future Net Revenue Working Interest (35%) (US$000) NPV10
Proved Undeveloped (1P) 230,672.5 80,735.4 2,134,911.1 720,915.6
Probable 83,165.3 29,107.8 968,135.7 244,866.9
Proved + Probable (2P) 313,837.7 109,843.2 3,103,046.8 965,782.5
Possible 94,326.3 33,014.2 1,399,698.4 303,227.4
Proved + Probable + Possible (3P) 408,164.0 142,857.4 4,502,745.3 1,269,009.9
Note: Oil volumes are expressed in thousands of barrels (MBBL). Gross (100%)
figures represent total field reserves; working interest figures represent
Rockhopper's 35 per cent share. Future net revenue is after deductions for
Rockhopper's share of state royalties, capital costs, abandonment costs,
operating expenses and estimates of Falkland Islands corporate income taxes.
NPV10 represents future net revenue discounted at an annual rate of 10 per
cent. NPV10 should not be construed as the fair market value of the
properties. All figures are based on the Base Price Case. See Economic
Parameters below.
Contingent Resources
The contingent resources figures below are unrisked - they have not been
adjusted for the probability of commercial development. These estimates should
not be aggregated with reserves without extensive consideration of the
differing degrees of technical and commercial risk.
Unrisked Gross (100%) Contingent Resources - Oil (MBBL)
Low Estimate (1C) MBBL Best Estimate (2C) MBBL High Estimate (3C) MBBL
Development Pending 238,736.9 412,481.3 531,242.9
Development On Hold 78,971.1 181,078.2 299,712.5
Development Not Viable 5,713.6 9,602.7 14,529.9
Total 323,421.6 603,162.1 845,485.3
Unrisked Working Interest (35%) Contingent Resources - Oil (MBBL)
Low Estimate (1C) MBBL Best Estimate (2C) MBBL High Estimate (3C) MBBL
Development Pending 83,557.9 144,368.4 185,935.0
Development On Hold 27,639.9 63,377.4 104,899.4
Development Not Viable 1,999.8 3,360.9 5,085.5
Total 113,197.6 211,106.7 295,919.9
Summary of Unrisked Working Interest (35%) Contingent Cash Flows after
Falkland Islands Taxes
Economic analysis has been performed on the Development Pending contingent
resources only.
Total (US$000) Undiscounted NPV10 (US$000)
Low Estimate (1C) 1,813,859.5 554,524.8
Best Estimate (2C) 4,286,664.2 1,202,666.3
High Estimate (3C) 6,244,948.0 1,610,092.7
Economic Parameters
The Report has been prepared using the following Base Price Case oil price
parameters, based on Brent Crude prices adjusted for quality, transportation
fees and market differentials:
Period Ending Oil Price (US$/Barrel)
31 December 2026 62.99
31 December 2027 64.79
Thereafter 73.63
The development scenario underlying the NPV calculation for the contingent
resources aligns with the previously disclosed multi-phase, two-FPSO scheme
comprising the Northern Development Area ("NDA") Phases 1, 2 and 3 and the
Central Development Area ("CDA") Phases 1 and 2.
FPSO
Notice was given to disconnect the FPSO from its former location at the
Lancaster field in the UK and it has begun its move to a shipyard so that a
full inspection can be carried out ahead of moving the vessel to a suitable
dry dock to undertake the required work ahead of commencing production. Work
has commenced on the Falkland Islands, including upgrading the temporary dock
facility and constructing suitable lay down, warehousing and offices.
Construction of the flexibles and umbilicals has commenced and work on the
FPSO turret and moorings is due to commence shortly.
Due to the commencement of the war with Iran in March 2026 and its
ramifications, the Navitas decided to change the location of the FPSO upgrade
and adaptation works and execute them at a shipyard in Asia, instead of the
original Middle East plan. Following this change, an amount of approximately
USD 45 million (100%) was added to the Project's budget. Rockhopper benefits
from a loan from Navitas covering 2/3 of its 35% equity requirement for Phase
1 of the Sea Lion development. Accordingly, the net increase in Rockhopper's
equity costs was US$5.25 million and Rockhopper remains funded for Phase 1 of
the project.
Falklands taxation agreement
As part of the FID process, Rockhopper and the Falkland Island Government
("FIG") entered into a final settlement agreement relating to a previously
disclosed disputed taxation amount on the farm out to Premier Oil in 2012, as
the existing arrangement was incompatible with achieving FID at Sea Lion.
The final settlement agreement also settled any tax liability in relation to
the farm out to Navitas in 2022. The new arrangement provides that
Rockhopper shall pay to FIG (the tax liability) in instalments, amounting to a
total of £30 million on an undiscounted basis. The payment schedule is as
follows
· £1m at signing of the final settlement agreement (paid)
· £2m at Phase 1 sanction (paid)
· £1m 30 calendar days from First Oil (the "Payment Date")
· £2m on the first anniversary of the Payment Date
· £3m on the second anniversary of the Payment Date
· £7m on the third anniversary of the Payment Date
· £7m on the fourth anniversary of the Payment Date
· £7m on the fifth anniversary of the Payment Date
The final settlement provides that early payments can be made, attracting a
discount of 10% per annum. If payments are made late, the agreement provides
for interest to be paid at a rate of 10% per annum. FIG's existing
security, including charges over certain Group subsidiary assets, was replaced
by security over a dedicated Rockhopper bank account into which all of the net
post financing, post Navitas loan repayment cash flows will be distributed.
Ombrina Mare annulment
On 3 June 2025, it was announced that the Republic of Italy succeeded in
having the International Centre of Settlement of Investment Disputes ("ICSID")
Ombrina Mare Arbitration Award (the "Award") annulled by the ad hoc Panel.
Italy submitted an application in October 2022 to the ICSID seeking to annul
the Award under Article 52 of the ICSID Convention. On 14 October
2024, Rockhopper announced it had decided, in line with normal market
practice, that insuring to protect shareholders against loss resulting from an
annulment of the Award was the most prudent course of action.
Following the annulment of the Award, Rockhopper made a claim under terms of
the insurance policy and, on 29 August 2025, confirmed it had received the
full €31 million entitlement under the insurance arrangements (the
"Insurance Proceeds").
The resubmission of a new request for arbitration was made in September 2025,
and the new funder continues to be responsible for all costs associated with
this. 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
As announced on 14 October 2024, Rockhopper signed an SPA to dispose its
Italian interests, other than the Ombrina Mare arbitration, to Zodiac Energy
Limited ("Zodiac"), a locally run, Italian E&P company.
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 with the exception of the Ombrina
Mare Arbitration Award.
Under the terms of the SPA, Zodiac will pay €1 consideration to Rockhopper
on Completion, with Rockhopper retaining upside participation in two
undeveloped licences. Completion is conditional on Italian regulatory
approval. At Completion, Rockhopper Civita Limited (the entity being sold)
must hold a minimum cash balance of €5.5 million
In order to satisfy a number of additional information requests from the
Italian regulator, the long-stop date for the transaction has been extended to
30 June 2026.
Board composition
We thank Alison Baker for her input since 2018 and welcomed Richard Slape to
the Board just after the year end to succeed Alison as Audit Chair. With
Rockhopper entering a new phase in its development having taken FID at Sea
Lion, and to reflect the increasingly international nature of the shareholder
register, two additional directors will be proposed at the upcoming AGM,
further details will be provided in a separate RNS shortly.
Summary
Having discovered Sea Lion in May 2010 and gone on to appraise the field
during 2010 and 2011, all 100% as operator, sanctioning the first phase of the
Project represents the most material step since that time towards unlocking
the huge value inherent in the Project for all stakeholders.
The Placing and Open Offer, combined with the senior debt and Navitas loans,
ensured Rockhopper was fully funded and able to take FID.
The Navitas loan, which covers 2/3 of the net Rockhopper equity requirement,
provides good insulation against any inflation in project costs and the 50
million outstanding warrants at 80 pence per share give potential access to
additional funding should any be required.
Extracting numbers from NSAI Report shows a value of in excess of US$2 billion
when aggregating Rockhopper's net 2P + 2C reserves and resource base of 321
mmbbls at a realised oil price of US$71.13/bbl. This increases to US$2.8
billion at a realised oil price of US$82.17/bbl. The Report also highlights
the very significant running room and upside within the Rockhopper acreage.
Having sanctioned Phase 1 of Sea Lion, we look forward to continuing our work
with Operator Navitas - not only toward first oil in 2028, but also to explore
opportunities to accelerate the development of remaining discovered resources
and exploration upside in the basin.
FINANCIAL REVIEW
OVERVIEW
The most significant event in 2025 was the sanctioning of the Sea Lion
Development. In December 2025, the Group achieved Final Investment Decision
("FID") on Phase 1 of the Sea Lion oil field, located in the North Falkland
Basin. This milestone was underpinned by a successful equity fundraise raising
net proceeds of US$135 million, financial close on a US$350 million Senior
Debt Facility, and approval of the Field Development Plan by the Falkland
Islands Government. As a result of FID, the Group's Exploration and Evaluation
assets of US$329.2 million were reclassified to tangible development and
production assets.
The year also saw the conclusion of the Ombrina Mare arbitration annulment
proceedings. In June 2025 the ad hoc Committee ruled in favour of Italy,
annulling the Award in full. Whilst this was a disappointing outcome, the
Group had in place an insurance policy that entitled Rockhopper to receive
€31 million, which was received in August 2025. Separately, a new request
for arbitration was submitted in September 2025, the costs of which are borne
by the Group's funding partner under the Monetisation Agreement.
RESULTS FOR THE YEAR
For the year ended 31 December 2025 the Group, including discontinued
operations, reported a loss of US$39.7 million (2024: profit of US$47.6
million). The swing from profit to loss is principally driven by the reduction
in fair value of the Monetisation Agreement and the associated accounting for
insurance proceeds following the annulment of the Award, together with a
significant increase in administrative expenses in a year of exceptional
corporate activity.
DISCONTINUED OPERATIONS
The Group's Greater Mediterranean operations, held within Rockhopper Civita
Limited, continue to be classified as held for sale and presented as
discontinued operations in accordance with IFRS 5. The disposal remains
subject to regulatory approval from the Italian regulator, and the long-stop
date under the Sale and Purchase Agreement has been extended to 30 June 2026.
Under the terms of the transaction Rockhopper Civita Limited is required to
hold €5.5 million in cash and cash equivalents on transfer; accordingly
US$8.2 million of cash and term deposits held by the entity is presented
within assets classified as held for sale at the year end. The loss from
discontinued operations for the year was US$1.5 million (2024: profit of
US$1.3 million).
OPERATING COSTS
Exploration and Evaluation Expenses
Exploration and evaluation expenses of US$0.3 million (2024: US$0.4 million)
represent write-offs of costs relating to areas of the North Falkland Basin
and South Falkland Basin that will not form part of the Sea Lion Phase 1
project.
Administrative Expenses
Administrative expenses increased significantly to US$9.8 million (2024:
US$3.3 million). The increase reflects the exceptional level of corporate
activity in the year, including costs associated with the FID process, the
equity fundraise and the entry into the Senior Debt Facility. Total staff
costs were US$6.9 million (2024: US$3.4 million), which includes the impact of
bonuses relating to the sanctioning of the Sea Lion development as well as
US$1.8 million for accrued Employers National Insurance, caused by a
substantial increase in share price in the period which has led to an increase
in the NI provision for in-the-money employee share options. Other
professional fees were US$2.1 million (2024: US$0.4 million), reflecting
strategic advisory costs associated with the FID process, the Senior Debt
Facility and the equity placing as well as ensuring the Group is prepared for
the post first oil world.
Foreign Exchange
A net foreign exchange gain of US$3.0 million (2024: US$0.2 million) arose in
the year, predominantly reflecting the strengthening of Sterling and Euro
against the US Dollar and the Group's sterling and euro-denominated monetary
positions.
OTHER INCOME AND EXPENSES
Other income for the year of US$35.2 million (2024: US$79.8 million)
represents the €31 million insurance proceeds receivable following the
annulment of the Award by the ad hoc Committee in June 2025, received in
August 2025. Other expenses of US$69.7 million (2024: US$1.0 million)
comprise: a reduction in the fair value of the Monetisation Agreement of
US$42.9 million; recognition of an IFRS 9 liability for the potential
repayment of insurance proceeds of US$21.6 million; the write-off of the
remaining insurance premium prepayment of US$3.9 million; and other costs of
US$1.3 million. The net charge through other income and expenses in the year
is US$34.5 million (2024: net income of US$78.8 million).
In June 2025 the ad hoc Committee issued its decision, finding in favour of
Italy and annulling the Award in its entirety. As a result, the Tranche 2
payment of €65 million will not be received under the Monetisation
Agreement. A new request for arbitration against Italy was submitted in
September 2025, the costs of which are borne by the Specialist Fund under the
Monetisation Agreement.
The Monetisation Agreement continues to be recognised as a financial
instrument at fair value through profit or loss in accordance with IFRS 9. The
fair value reduced from US$58.2 million to US$22.1 million in the year,
through a combination of changes in fair value and foreign exchange, resulting
in a loss of US$42.9 million recognised in other expenses. The fair value of
US$22.1 million is presented within non-current financial assets at 31
December 2025, reflecting the expected long-term timing of any future recovery
from the resubmitted arbitration.
Under the terms of the Insurance, to the extent Rockhopper makes any future
financial recovery from the resubmitted arbitration or otherwise, after
deducting reasonable costs and expenses, that recovery will be utilised to
reimburse the insurers. Management has determined that this repayment
obligation is a financial liability within the scope of IFRS 9 and has
recognised a non-current liability of US$21.6 million representing its fair
value, estimated on the same probability-weighted basis as the Tranche 3
proceeds and capped at an undiscounted value of €31 million.
FINANCE INCOME AND EXPENSE
Finance income for the year was US$2.1 million (2024: US$1.9 million),
comprising the unwinding of the discount on the fair value of the Monetisation
Agreement prior to annulment of US$1.2 million (2024: US$1.3 million) and bank
and deposit interest of US$0.9 million (2024: US$0.6 million).
Finance expense increased to US$2.4 million (2024: US$0.3 million),
principally reflecting interest of US$2.2 million accruing on the co-venturer
loan provided by Navitas in connection with the Sea Lion pre-FID expenditure
programme (2024: US$0.2 million). The cumulative balance of this loan,
including accrued interest, at the year end was US$52.5 million (2024: US$15.4
million).
CASH MOVEMENTS AND CAPITAL EXPENDITURE
As at 31 December 2025, the Group had cash and cash equivalents of US$157.6
million (31 December 2024: US$0.9 million) and term deposits of US$13.4
million (31 December 2024: US$20.0 million). In addition, US$8.2 million of
cash held within Rockhopper Civita Limited is presented within assets
classified as held for sale, being ring-fenced in accordance with the terms of
the disposal agreement. Together with the undrawn committed Senior Debt
Facility of US$350 million, total available liquidity at the year end was
US$521.0 million.
Cash flows from operating activities generated US$29.5 million (net of working
capital movements and before tax). Tax paid in the year was US$5.3 million,
principally comprising the first two instalment payments under the FIG
Settlement Deed totalling GBP3 million. The principal cash movements during
the period are set out below:
US$m
Opening cash (31 December 2024) 0.9
Cash generated from operating activities 29.5
Tax paid (5.3)
Term deposits (net release) 8.2
Purchase of PPE and intangibles (0.0)
Exercise of share options 0.2
Issuance of shares and warrants (net of costs) 135.0
Loan funding (co-venturer loan) 9.1
Prepaid financing costs (12.8)
Exchange gain on cash 1.0
Closing cash per cash flow statement (31 December 2025) 165.8
Less: cash within assets held for sale (Rockhopper Civita) (8.2)
Cash and cash equivalents per balance sheet 157.6
Additions to exploration and evaluation assets during the year of US$58.4
million (2024: US$14.7 million) relate to the Sea Lion development and were
funded primarily through the pre-FID co-venturer loan facility provided by
Navitas.
Following FID and financial close, all exploration and evaluation assets of
US$329.2 million were reclassified to development and production assets within
property, plant and equipment at 31 December 2025. An impairment assessment
was performed immediately prior to reclassification in accordance with IAS 36,
using a Value in Use discounted cash flow approach with a pre-tax discount
rate of 8.08%, and no impairment was identified. Post-FID capital commitments
of US$579 million have been approved in connection with the Sea Lion Phase 1
development programme.
OTHER RECEIVABLES
Other receivables at 31 December 2025 were US$18.7 million (2024: US$62.3
million). The significant decrease reflects the cash receipt of the €31
million insurance proceeds in August 2025 and the reclassification of the
Monetisation Agreement fair value to non-current financial assets, partially
offset by an increase in prepayments. Prepayments of US$18.0 million at 31
December 2025 principally comprise prepaid costs and loan arrangement fees
relating to the Senior Debt Facility, which will be capitalised and amortised
over the term of the facility.
The fair value of the Monetisation Agreement of US$22.1 million is presented
as a non-current financial asset at 31 December 2025 (2024: US$58.2 million
within current other receivables), reflecting the expected long-term timing of
any future recovery from the resubmitted arbitration.
TAXATION
On 9 December 2025 the Company and the Falkland Islands Government ("FIG")
entered into a final Settlement Deed in respect of the historic tax
uncertainty arising from the 2012 and 2022 farm-outs. The Settlement Deed
provides for total payments of GBP30 million in eight instalments linked to
the Sea Lion development timeline. The first two instalments totalling GBP3
million were paid in December 2025. The Settlement Deed also operates to
settle any tax liability arising in connection with the 2022 farm-out to
Navitas Petroleum.
The liability has been discounted at 10% per annum, being the rate inherent in
the Settlement Deed for early payment, giving a present value of GBP15.5
million (US$20.9 million) at 31 December 2025. No further instalments fall due
within twelve months of the balance sheet date, with all remaining payments
linked to the timing of First Oil, which is not expected until 2028;
accordingly the full carrying value is presented within non-current
liabilities.
The net tax credit of US$3.8 million (2024: charge of US$30.4 million)
reflects: a current tax charge of US$1.0 million, comprising a prior year
adjustment of US$1.9 million mainly arising from the remeasurement of the FIG
Settlement Deed liability; and a deferred tax credit of US$6.7 million
reflecting the reduction in deferred tax liabilities in the year.
EQUITY AND FINANCING
In December 2025 the Company completed an equity fundraise by way of a Placing
and Subscription at an issue price of 53 pence per Unit, raising gross
proceeds of US$142 million. Each Unit comprised one new Ordinary Share and,
for every four new Ordinary Shares subscribed for, one Warrant exercisable at
80 pence per Ordinary Share. The Placing utilised a cashbox structure in
accordance with section 612 of the Companies Act 2006, with the premium on the
ordinary shares recognised within the merger reserve. Net proceeds received in
the year, after costs of US$7.0 million, were US$135.0 million.
As a result of the fundraise and the exercise of share options during the
year, total equity increased to US$347.2 million at 31 December 2025 (2024:
US$248.4 million). The weighted average number of shares in issue during the
year was 645.7 million (2024: 643.6 million). A basic loss per share of 6.15
cents is reported (2024: earnings per share of 7.40 cents).
Subsequent to the year end, the Company completed an Open Offer to Qualifying
Shareholders at the same issue price of 53 pence per share, raising gross
proceeds of approximately GBP6.9 million (approximately US$9.2 million)
through the issue of 13,188,036 new ordinary shares. Admission took place on
21 January 2026, at which date the Company's total issued share capital
comprised 860,504,777 ordinary shares.
LIQUIDITY, COUNTERPARTY RISK AND GOING CONCERN
The Directors have assessed the Group's ability to continue as a going concern
for a period of at least twelve months from the date of approval of the
financial statements, being to 30 June 2027 (the "Assessment Period").
At 31 December 2025, the Group had cash and cash equivalents of US$157.6
million, term deposits of US$13.4 million and an undrawn committed Senior Debt
Facility of US$350 million, providing total available liquidity of US$521.0
million. The Group is pre-revenue and has not yet achieved first oil.
The base case cash flow forecast, which incorporates the Sea Lion Phase 1
development programme consistent with the approved banking model together with
corporate and administrative expenditures and tax obligations, indicates that
the Group's existing cash resources are sufficient to meet all committed
expenditure within the Assessment Period. The Directors are satisfied that,
having regard to the contingencies in the approved cost estimate, the Equity
Overrun Support mechanism, and the cost-sharing structure under the
Co-Venturer Loan arrangements under which the Group is required to fund only
one-third of its share of project capital costs prior to completion, the
Group's funding position is resilient to reasonably foreseeable cost movements
within the Assessment Period. Sensitivity analysis, including a reasonable
downside scenario modelling gross capital expenditure increases above the base
case, confirms that the Group maintains sufficient liquidity under all
scenarios considered.
First drawdown under the Senior Debt Facility is forecast to occur toward the
end of the Assessment Period. Management has reviewed the conditions precedent
to first drawdown and considers all are reasonably capable of being satisfied
in accordance with the project timeline.
The Directors do not consider that any material uncertainty exists that would
cast significant doubt on the Group's ability to continue as a going concern
within the Assessment Period. Accordingly, they consider it appropriate to
adopt the going concern basis of accounting in preparing these financial
statements.
PRINCIPAL RISKS AND UNCERTAINTIES
Rockhopper's only material asset is its 35% non-operating interest in the Sea
Lion Phase 1 development. All principal risks therefore relate to this single
asset. A full description of each risk and the mitigating actions taken by the
Board is set out in the Principal Risks and Uncertainties section of the
Strategic Report.
- Funding and capital structure: The Group is fully funded to First Oil
under its base case, supported by the US$350 million Senior Debt Facility, the
Navitas Post-FID Loan and Underwriting Warrants; material cost overruns beyond
the funded contingencies could require additional capital.
- Cost overrun: Phase 1 gross capital costs are estimated at
approximately US$1.7 billion; whilst lump sum contracts have been awarded for
major scopes and contingency is included, global supply chain pressures could
drive costs above the current estimate.
- Oil price: Sea Lion has a certified breakeven below US$24 per barrel,
providing significant headroom; a sustained material decline in oil prices
would nonetheless reduce project returns and could affect future financing.
- Project execution: All Phase 1 workstreams are on track against the H1
2028 First Oil target; execution risks inherent in a large remote offshore
development remain, including subsea installation, drilling and on-island
infrastructure.
- Geopolitical - sovereignty: The sovereignty of the Falkland Islands is
disputed by Argentina; whilst no operational disruption has been experienced,
the dispute represents a background risk to the project environment.
- Non-operator governance: As a 35% non-operating partner, Rockhopper
does not control day-to-day development decisions; it participates actively in
JV governance and Navitas is a funded, committed operator.
- Energy transition: Lender appetite for oil and gas financing has
narrowed; project financing has been secured and Financial Close achieved, and
the Group's focus is on maintaining full compliance with the ESG commitments
attached to the debt facility.
- Physical climate: The South Atlantic operating environment carries
inherent weather risk; vessels, equipment and operations are specified for the
metocean conditions and the project budget includes appropriate weather
contingency.
- Italian disposal: Completion of the sale of Rockhopper Civita Limited
remains subject to Italian regulatory approval, with the long-stop date
extended to 30 June 2026.
- HSE and security: No HSE incidents have been recorded to date; the
project complies with all applicable HSSE obligations in accordance with
regulatory and project financing requirements, and execution strategies are
adapted to manage geopolitical security risks.
- People and organisation: As a small company with a single material
asset, Rockhopper is reliant on a focused team; the Remuneration Committee
regularly reviews compensation to retain key individuals through the
development phase.
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2025
Notes 2025 2024
$'000 $'000
Exploration and evaluation expenses 4 (254) (393)
Administrative expenses 5 (9,770) (3,330)
Charge for share based payments 8 (146) (76)
Foreign exchange movement 9 2,981 170
Results from operating activities (7,189) (3,629)
Other income 10 35,179 79,802
Other expenses 10 (69,726) (1,024)
Finance income 11 2,086 1,927
Finance expense 11 (2,354) (296)
(Loss)/ profit before tax (42,004) 76,780
Tax credit/(expense) 12 3,825 (30,421)
(Loss)/profit from continuing operations (38,179) 46,359
(Loss)/ profit for the year from discontinued operations 13 (1,502) 1,253
(Loss)/ profit attributable to equity shareholders of the parent company (39,681) 47,612
(Loss)/profit per share attributable to the equity shareholders of the parent
company: cents
Basic 14 (6.15) 7.40
Diluted 14 (6.15) 7.28
Basic (continuing operations) 14 (5.91) 7.20
Diluted (continuing operations) 14 (5.91) 7.09
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2025
2025 2024
$'000 $'000
(Loss)/ profit for the year (39,681) 47,612
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations (2,094)
3,154
Total comprehensive (loss)/ profit for the year (36,527) 45,518
The notes on pages 57 to 81 form an integral part of these consolidated
financial statements.
CONSOLIDATED BALANCE SHEET
as at 31 December 2025
Notes 2025 2024
$'000 $'000
Non current assets
Exploration and evaluation assets 15 - 271,110
Property, plant and equipment 16 329,240 10
Financial asset 10 22,148
Total non current assets 351,388 271,120
Current assets
Other receivables 17 18,709 62,330
Term deposits 18 13,429 19,969
Cash and cash equivalents 157,619 915
Total current assets 189,757 83,214
Assets classified as held for sale 13 9,605 1,203
Total assets 550,750 355,537
Current liabilities
Other payables 19 48,796 6,516
Tax payable 20 1,012 1,806
Total current liabilities 49,808 8,322
Non-current liabilities
Other payables 10, 19 21,645 -
Co-venturers loan 19 52,493 15,354
Tax payable 20 20,873 22,300
Provisions 21 2,140 1,600
Deferred tax liability 22 39,137 45,305
Total non current liabilities 136,288 84,559
Liabilities associated with assets held for sale 13 17,441 14,279
Total liabilities 203,537 107,160
Equity
Share capital 23 12,209 9,455
Share premium 24 12,408 12,585
Options and warrants reserve 24 13,978 2,185
Own shares held in trust 24 (332) (1,320)
Merger reserve 24 198,987 78,208
Foreign currency translation reserve 24 (7,441) (10,595)
Special reserve 24 175,281 175,281
Retained losses 24 (57,877) (17,422)
Attributable to the equity shareholders of the company 347,213 248,377
Total liabilities and equity 550,750 355,537
These financial statements on pages 53 to 81 were approved by the directors
and authorised for issue on2 June 2026 and are signed on their behalf by:
Samuel Moody
Chief Executive Officer
Rockhopper Exploration plc Registered Company Number: 05250250
The notes on pages 57 to 81 form an integral part of these consolidated
financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2025
Options and warrants reserve Foreign currency translation
Share capital Share premium Shares held Merger reserve reserve Special reserve Retained losses Total equity
in trust
$'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 year - - - - - - - 47,612 47,612
Other comprehensive loss for the year - - - - - (2,094) - - (2,094)
Total comprehensive profit for the year - - - - - (2,094) - 47,612 45,518
Share based payments (note 8) - - 76 - - - - - 76
Share issues (net of expenses) 259 2,404 - - - - - - 2,663
Other transfers - - - - - - - - -
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 year - - - - - - - (39,681) (39,681)
Other comprehensive profit for the year - - - - - 3,154 - - 3,154
Total comprehensive profit/(loss) for the year - - - - - 3,154 - (39,681) (36,527)
Transfers - - (258) 1,032 - - - (774) -
Issue of shares 2,754 (177) 11,905 (44) 120,779 - - - 135,217
Share based payments (note 8) - - 146 - - - - - 146
Balance at 31 December 2025 12,209 12,408 13,978 (332) 198,987 (7,441) 175,281 (57,877) 347,213
See note 24 for a description of each of the reserves of the Group.
Other transfers relate to Shares held in trust where they have been used to
satisfy exercised options.
The notes on pages 57 to 81 form an integral part of these consolidated
financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2025
Notes 2025 2024
$'000 $'000
Cash flows from operating activities
(Loss)/profit for the year (39,681) 47,612
Depreciation of property, plant and equipment 8 19
Share based payment expense 8 146 76
Written off exploration costs 15 254 393
Finance expenses 2,631 595
Finance income (2,180) (1,322)
Foreign exchange (4,859) (3,786)
Tax credit/(expense) 12 (3,866) 30,421
Operating cash flows before movements in working capital (47,547) 74,008
Changes in working capital:
Decrease/(increase) in receivables 44,857 (60,613)
Increase in payables 30,354 386
Increase/(decrease) in provisions 992 (2,397)
Cash generated by operating activities 28,656 11,384
Tax paid (5,327) -
Cash flows from investing activities
Purchase of PPE & intangibles (45) (1,834)
Cash and term deposits classified as held for sale (8,161) (17)
Restricted cash - 542
Term deposit movements 8,240 (15,073)
Interest on term deposits 858 -
Cash flow generated/(used in) investing activities 892 (16,382)
Cash flows from financing activities
Exercise of share options 189 2,213
Issuance of shares and warrants net of costs 135,028 -
Loan funding 9,102 -
Prepaid financing costs (12,824) -
Lease liability payments - (11)
Cash flow from financing activities 131,495 2,202
Exchange gain/loss on cash and cash equivalents 988 224
Net cash flow 155,716 (2,796)
Cash and cash equivalents brought forward 915 3,487
Cash and cash equivalents carried forward 157,619 915
The notes on pages 57 to 81 form an integral part of these consolidated
financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2025
1. Material 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 certain exploration licences
for the exploration and exploitation of oil and gas in the Falkland Islands.
In addition, it has operations in the Greater Mediterranean based in Italy
which have been classified as discontinued operations and whose assets and
liabilities are classified as held for sale. The registered office of the
Company is Warner House, 123 Castle Street, Salisbury, Wiltshire, SP1 3TB.
1.2 Statement of compliance
The consolidated financial statements of the Group have been prepared on a
going concern basis in accordance with UK adopted International Accounting
Standards in conformity with the requirements of the Companies Act 2006. The
consolidated financial statements were approved for issue by the board of
directors on 2 June 2026 and are subject to approval at the Annual General
Meeting of shareholders on 30 June 2026.
1.3 Basis of preparation
The results upon which these financial statements have been based were
prepared using the accounting policies set out below. These policies have been
consistently applied unless otherwise stated.
These consolidated financial statements have been prepared under the
historical cost convention with the exception of certain items which are
measured at fair value.
Items included in the results of each of the Group's entities are measured in
the currency of the primary economic environment in which that entity operates
(the "functional currency"). The consolidated financial statements are
presented in US Dollars ($), which is Rockhopper Exploration plc's functional
currency.
All values are rounded to the nearest thousand dollars ($'000) or thousand
pounds (£'000), except when otherwise indicated.
1.4 Change in accounting policy
Changes in accounting standards
In the current year the following new and revised Standards and
Interpretations have been adopted. None of these have a material impact on the
Group's annual results.
- Lack of Exchangeability (Amendment to IAS 21)
- IFRS Practice Statement 1 Management Commentary
New accounting pronouncements
The following amendments are effective for the period beginning 1 January
2026:
- Amendments to the Classification and Measurement of
Financial Instruments (Amendments to IFRS 9 and IFRS 7)
- Annual Improvements to IFRS Accounting Standards -
Volume 11
- Contracts Referencing Nature dependent Electricity
(Amendments to IFRS 9 and IFRS 7)
The following amendments are effective for the period beginning 1 January
2027:
- IFRS 18 Presentation and Disclosure in Financial
Statements
- IFRS 19 Subsidiaries without Public Accountability:
Disclosures
- IFRS for SMEs Accounting Standard - Third Edition
The Directors are assessing the impact of the above Standards, Amendments and
Interpretations. IFRS 18 is expected to impact presentation but not
measurement, and no material impact on the Group's financial position or
results is expected.
1.5 Going concern
The financial statements have been prepared on a going concern basis which the
Directors consider to be appropriate for the reasons set out below. The
Directors have assessed the Group's ability to continue as a going concern for
a period of at least twelve months from the date of approval of the financial
statements, being to 30 June 2027 (the "Assessment Period").
Background and financial position
The Group is an oil and gas development company whose principal asset is its
interest in Phase 1 of the Sea Lion field (the "Project"), located offshore to
the north of the Falkland Islands within the Group's PL032 licence. The Group
is currently pre-revenue and has not yet achieved first oil. The Group's
strategy is to advance the Project through to first oil, following which
revenue generation is expected to commence.
As at 31 December 2025, the Group had cash and cash equivalents of US$157.6
million, term deposit of US$13.4 million and an undrawn committed Senior Debt
Facility of US$350.0 million (together, total available liquidity of US$521.0
million). The Group has no producing assets. The Group concluded a successful
fundraising on 31 December 2025, receiving gross proceeds of US$136 million,
and financial close on the Project financing was achieved on 22 December 2025.
Assessment period and base case
The Directors have assessed the Group's going concern position over the
Assessment Period by reference to detailed cash flow forecasts prepared by
management covering sources and uses of funds to 30 June 2027. The base case
incorporates the Sea Lion Phase 1 Development programme consistent with the
approved banking model together with corporate and administrative expenditures
and tax obligations arising in the period.
Under the base case, the Group's existing cash resources are projected to be
sufficient to meet all committed expenditure within the Assessment Period.
Senior Debt Facility
The Group has in place a Senior Debt Facility of US$350 million to part-fund
the Project. The Facility was entirely undrawn as at 31 December 2025.
First drawdown under the Facility is forecast to occur toward the end of the
Assessment Period, subject to the satisfaction of conditions precedent
customary to a financing of this nature. Management has reviewed the
conditions precedent to first drawdown and considers all are reasonably
capable of being satisfied in accordance with the project timeline. The most
significant condition for the purposes of this assessment is the requirement,
prior to each drawdown, for an updated funding statement to confirm that no
funding shortfall exists. As noted above, no funding shortfall currently
exists, and management does not consider this condition to be at risk of not
being met within the Assessment Period.
Key considerations within the Assessment Period
In forming their view, the Directors have considered a number of factors
bearing on the Group's ability to continue as a going concern within the
Assessment Period. These include the level and nature of project costs
expected to be incurred, the resilience of the funding position to potential
cost movements, the ongoing availability of the Senior Debt Facility, and the
Group's compliance with applicable covenants and financial conditions.
The total cost estimate for the Sea Lion Phase 1 Development has been
externally validated and is predominantly based on executed contracts. The
majority of costs within the Assessment Period are fixed or substantially
fixed in nature. The Directors are satisfied that, having regard to the
contingencies included in the approved cost estimate, the additional funding
buffer provided through the Equity Overrun Support mechanism, and the
cost-sharing structure under the Co-Venturer Loan arrangements with the
Operator (under which the Group is required to fund only one-third of its
share of project capital costs prior to completion), the Group's funding
position is resilient to reasonably foreseeable cost movements within the
Assessment Period.
The Directors have also considered whether any circumstances are likely to
arise that would require the Banking Case underpinning the Facility to be
redetermined within the Assessment Period. Having assessed the relevant
trigger conditions - including significant movements in proved reserves, oil
price below contingency levels, significant cost escalation over the
contingency levels and the results of the first producer well - the Directors
consider the likelihood of Banking Case redetermination to be remote within
the Assessment Period due to the long-term nature of the project. The Facility
Agreement also provides that Lenders cannot refuse to fund solely because a
trigger event has occurred, which provides additional assurance as to the
availability of the Facility.
Sensitivity analysis has been performed, including a reasonable downside
scenario modelling on gross capital expenditure increases above the base
case. Under all scenarios considered, the Group maintains sufficient liquidity
within the Assessment Period.
Post-Assessment Period and longer-term funding
The Assessment Period considered by the Directors for the purpose of this
going concern assessment runs to 30 June 2027. Beyond that date, the Project
will be at a relatively early stage of what is a substantial, multi-year
development programme, and first oil is not expected to be achieved until
after the Assessment Period. The Project is large in scale and, as with any
development of this nature, there are a number of factors that could, over the
longer term, give rise to a need for the Group to secure additional financial
resources. These could include, amongst other things, movements in the oil
price environment, cost escalation above current contingencies, differences in
reservoir performance relative to current expectations, and the timing and
terms on which the Senior Debt Facility is drawn. The nature and quantum of
any such requirement, and the sources from which it might be met, would depend
on the circumstances prevailing at the time. Whilst the Directors have not
undertaken a detailed assessment of post-Assessment Period funding
requirements - which falls outside the scope of this going concern review -
they would expect, in the ordinary course, that a range of potential funding
options would be available to the Group including further equity or debt
financing. However, no assurance can be given that additional funding would be
available, or available on commercially acceptable terms, if and when
required.
Conclusion
Having considered the factors described above - in particular the Group's
current liquidity position, the base case cash flow forecasts, the resilience
of the funding position to reasonably foreseeable downside scenarios, and the
availability of the Senior Debt Facility within the Assessment Period - the
Directors are satisfied that the Group has adequate resources to continue as a
going concern for the Assessment Period. Accordingly, they consider it
appropriate to adopt the going concern basis of accounting in preparing these
financial statements. The Directors do not consider that any material
uncertainty exists that would cast significant doubt on the Group's ability to
continue as a going concern within the Assessment Period.
1.6 Material accounting policies
(A) Basis of accounting
The Group has identified the accounting policies that are most significant to
its business operations and the understanding of its results. These accounting
policies are those which involve the most complex or subjective decisions or
assessments, and relate to the capitalisation of exploration expenditure. The
determination of this is fundamental to the financial results and position and
requires management to make a complex judgement based on information and data
that may change in future periods.
Since these policies involve the use of assumptions and subjective judgements
as to future events and are subject to change, the use of different
assumptions or data could produce materially different results. The
measurement basis that has been applied in preparing the results is historical
cost.
The significant accounting policies adopted in the preparation of the results
are set out below.
(B) Basis of consolidation
The Group financial statements consolidate the financial statements of the
Company and its subsidiary undertakings drawn up to 31 December 2025.
Subsidiaries are those entities over which the Group has control including
those held for sale. Control is achieved where the Group has the power over
the subsidiary, is exposed, or has rights to variable returns from the
subsidiary and has the ability to use its power to affect its returns. All
subsidiaries are 100 per cent owned by the Group and there are no
non-controlling interests.
The results of subsidiaries acquired or disposed of during the year are
included in the income statement from the effective date of acquisition or up
to the effective date of disposal, as appropriate. Where necessary,
adjustments are made to the financial statements of subsidiaries acquired to
bring the accounting policies used into line with those used by other members
of the Group.
All intercompany balances have been eliminated on consolidation.
(C) Segmental reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision maker as required by IFRS8
Operating Segments. The chief operating decision maker, who is responsible for
allocating resources and assessing performance of the operating segments, has
been identified as the board of directors.
The Group's operations are made up of three segments, the oil and gas
exploration and production activities in the geographical regions of the
Falkland Islands and the Greater Mediterranean region as well as its corporate
activities mainly centered in the UK.
(D) Oil and gas assets
The Group applies the successful efforts method of accounting for exploration
and evaluation ("E&E") costs, having regard to the requirements of IFRS6 -
'Exploration for and evaluation of mineral resources'.
Exploration and evaluation ("E&E") expenditure Expensed exploration &
evaluation costs
Expenditure on costs incurred prior to obtaining the legal rights to explore
an area, geological and geophysical costs are expensed immediately to the
income statement.
Capitalised intangible exploration and evaluation assets
All directly attributable E&E costs are initially capitalised in well,
field, prospect, or other specific, cost pools as appropriate, pending
determination.
Treatment of intangible E&E assets at conclusion of appraisal activities
Intangible E&E assets related to each cost pool are carried forward until
the existence, or otherwise, of commercial reserves have been determined,
subject to certain limitations including review for indicators of impairment.
If commercial reserves have been discovered, the carrying value, after any
impairment loss, of the relevant E&E assets, are then reclassified as
development and production assets within property plant and equipment.
However, if commercial reserves have not been found, the capitalised costs are
charged to expense.
Development and production assets
Development and production assets, classified within property, plant and
equipment, are accumulated generally on a field-by-field basis and represent
the costs of developing the commercial reserves discovered and bringing them
into production, together with the E&E expenditures incurred in finding
commercial reserves transferred from intangible E&E assets.
Depreciation of producing assets
The net book values of producing assets are depreciated generally on a
field-by-field basis using the unit-of-production method by reference to the
ratio of production in the year and the related commercial reserves of the
field, taking into account the future development expenditure necessary to
bring those reserves into production.
Disposals
Net cash proceeds from any disposal of an intangible E&E asset are
initially credited against the previously capitalised costs. Any surplus
proceeds are credited to the income statement.
Decommissioning
Provision for decommissioning is recognised in full when the related
facilities are installed. The amount recognised is the present value of the
estimated future expenditure. A corresponding amount equivalent to the
provision is also recognised as part of the cost of the related oil and gas
property. This is subsequently depreciated as part of the capital costs of the
production facilities. Any change in the present value of the estimated
expenditure is dealt with prospectively as an adjustment to the provision and
the oil and gas property. The unwinding of the discount is included in finance
cost.
(E) Foreign currency translation Functional and presentation currency:
Items included in the results of each of the Group's entities are measured
using the currency of the primary economic environment in which the entity
operates, the functional currency. The consolidated financial statements are
presented in US$ as this best reflects the economic environment of the oil
exploration sector in which the Group operates. The Group maintains the
financial statements of the parent and subsidiary undertakings in their
functional currency. Where applicable, the Group translates subsidiary
financial statements into the presentation currency, US$, using the closing
rate method for assets and liabilities which are translated at the rate of
exchange prevailing at the balance sheet date and rates at the date of
transactions for income statement accounts. Differences are taken through the
Statement of Comprehensive Income to reserves.
Transactions and balances:
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions
and from the translation at year end exchange rates of monetary assets and
liabilities denominated in foreign currencies are expensed in the income
statement, except when deferred in equity as qualifying cash flow hedges and
qualifying net investment hedges.
The year end rates of exchange were:
31 December 2025 31 December 2024
£ : US$ 1.35 1.25
€ : US$ 1.17 1.04
(F) Revenue and income
There is no revenue in either this or the prior period.
Investment income consists of interest receivable for the period. Interest
income is recognised as it accrues, taking into account the effective yield on
the investment.
(G) Non-derivative financial instruments
Financial assets and financial liabilities are recognised on the Group's
balance sheet when the Group has become a party to the contractual provisions
of the instrument.
(i) Other receivables
Other receivables are initially measured at fair value. Those that meet the
following conditions are measured subsequently at fair value through other
comprehensive income (FVTOCI):
· the financial asset is held within a business
model whose objective is achieved by both collecting contractual cash flows
and selling the financial assets; and
· the contractual terms of the financial asset give
rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
By default, all other financial assets are measured subsequently at fair value
through profit or loss (FVTPL).
The Group recognises an allowance for expected credit losses for all debt
instruments not held at fair value through profit or loss. Expected credit
losses are based on the difference between the contractual cash flows due in
accordance with the contract and all the cash flows that the Group expects to
receive, discounted at an approximation of the original effective interest
rate. For intercompany loans that are repayable on demand, expected credit
losses are recognised on the assumption that repayment of the loan is
demanded at the reporting date. Where the borrower could not repay the loan if
demanded at the reporting date, the expected manner of recovering the loan is
considered in measuring the expected credit losses. This may include a repay
over time strategies discounted at the loan's effective interest rate, or a
fire sale of less liquid assets.
(ii) Restricted cash
Restricted cash is disclosed separately on the face of the balance sheet and
denoted as restricted when it is not under the exclusive control of the Group.
All amounts relate to balances held as security in relation to property
leases.
(iii) Term deposits
Term deposits are disclosed separately on the face of the balance sheet when
their term is equal or greater than one month and they are unbreakable.
(iv) Cash and cash equivalents
They are stated at carrying value which is deemed to be fair value. Cash and
cash equivalents comprise instant access bank balances as well as a small
amount of cash in hand.
(v) Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. An equity instrument
is any contract that evidences a residual interest in the assets of the Group
after deducting all of its liabilities.
(vi) Account and other payables
Account payables are initially recognised at fair value and subsequently at
amortised cost using the effective interest method.
(vii) Insurance Liability
The Insurance Liability recognised in the year relates to an insurance policy.
Under its terms the Group does not have the unconditional right to avoid
delivering cash and hence it has been recognised as a financial liability
under IFRS 9. As such the liability is fair valued on initial recognition and
adjusted for movements in fair value through profit and loss in subsequent
periods
(viii) Equity instruments
Equity instruments issued by the Company are recorded at the proceeds
received, net of direct issue costs.
(H) Income taxes and deferred taxation
The current tax amount is based on the taxable profits or losses of the year,
after any adjustments in respect of prior years. Tax, including tax relief for
losses if applicable, is allocated over profits before tax and amounts charged
or credited to reserves as appropriate.
Deferred taxation is recognised in respect of all taxable temporary
differences that have originated but not reversed at the balance sheet date
where a transaction or events have occurred at that date that will result in
an obligation to pay more, or a right to pay less or to receive more, tax,
with the exception that deferred tax assets are recognised only to the extent
that its considered probable that there will be suitable taxable profits from
which the future reversal of the underlying temporary differences can be
deducted.
Deferred tax is measured on an undiscounted basis at the tax rates that are
expected to apply in the periods in which temporary differences reverse, based
on tax rates and laws enacted or substantively enacted at the balance sheet
date.
Where there are uncertainties over how to apply the recognition and
measurement requirements in IAS 12 the group applies IFRIC 23, Uncertainty
over Income TaxTreatment.
(I) Share based remuneration
The Group issues equity settled share based payments to certain employees.
Equity settled share based payments are measured at fair value (excluding the
effect of non market based vesting conditions) at the date of grant. The fair
value determined at the grant date of the equity settled share based payments
is expensed on a straight line basis over the vesting period, based on the
Group's estimate of shares that will eventually vest and adjusted for non
market based vesting conditions.
Cash settled share based payment transactions result in a liability. Services
received and liabilities incurred are measured initially at fair value of the
liability at grant date, and the liability is remeasured each reporting period
until settlement. The liability is recognised on a straight line basis over
the period that services are rendered.
(J) Capital commitments
Capital commitments include all projects for which specific board approval has
been obtained up to the reporting date. Projects still under investigation for
which specific board approvals have not yet been obtained are excluded.
2. Use of estimates, assumptions and judgements
The Group makes estimates, assumptions and judgements that affect the reported
amounts of assets and liabilities. Estimates, assumptions and judgements are
continually evaluated and based on historical experience and other factors,
including expectations of future events that are believed to be reasonable
under the circumstances.
The key assumptions concerning the future, and other key sources of estimation
uncertainty at the balance sheet date, that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are discussed in the relevant note as is sensitivity
analysis as required. The key areas identified and the relevant note are as
follows:
Fair value of Monetisation Agreement and Insurance Liability (note 10) -
estimates
To calculate the fair value of the Monetisation Agreement and the directly
associated Insurance Liability involved estimation. Future cash flows under
the agreement are contractual and it was measured at fair value using a
discounted cash flow basis. This required estimating the chance of success in
proceedings, costs of proceedings as well as the amount and timing of these
cash flows and the discount rate applied.
Carrying value of Development and Production assets (note 16) - judgements
During the period Management made an assessment that commercial viability and
technical feasibility was achieved in the period and the asset was transferred
to development and production assets. As part of the transfer the assets were
assessed for impairment, as detailed in note 15 and note 16, and found that
the commercially viable quantities of resources meant that the carrying amount
is likely to be recovered in full.
Tax payable (note 20) - estimates
The Group recognised an estimated Non-current tax payable of $20.9 million
arising from the historic farm-outs in the Falkland Islands which in the
period was finalised with the Falkland Islands Tax Authority. Following this
agreement the only uncertainty is the timing of future tax payments as they
are all a function of first oil.
Decommissioning costs (note 21) -estimates
Estimates are made around appropriate inflation and discount rates to be
applied as well as the timing of any future decommissioning. Decommissioning
costs are uncertain and management's cost estimates can vary in response to
many factors, including changes to the relevant legal requirements, the
emergence of new technology or experience at other assets. The expected
timing, work scope and amount of expenditure may also change.
3. Segmental information
The Group's operations are located and managed in three geographically
distinct business units; namely the Falkland Islands, the Greater
Mediterranean, and Corporate (includes UK and the Ombrina Mare Arbitration).
Some of the business units currently do not generate any revenue or have any
material operating income. The business is only engaged in one business, that
of upstream oil and gas exploration and production.
Greater Mediterranean Total (Continuing and Discontinued)
Falkland Islands Total (Discontinued)
Corporate (Continuing)
Year ended 31 December 2025 $'000 $'000 $'000 $'000 $'000
Cost of sales - - - (1,459) (1,459)
Gross loss - - - (1,459) (1,459)
Exploration and evaluation expense (254) - (254) - (254)
Administrative expenses - (9,770) (9,770) 200 (9,570)
Charge for share based payments - (146) (146) - (146)
Foreign exchange gain - 2,981 2,981 - 2,981
Results from operating activities and other income (254) (6,935) (7,189) (1,259) (8,448)
Other income - 35,179 35,179 - 35,179
Other expenses - (69,726) (69,726) - (69,726)
Finance income - 2,086 2,086 94 2,180
Finance expense (2,257) (97) (2,354) (337) (2,691)
(Loss) before tax (2,511) (39,493) (42,004) (1,502) (43,506)
Tax (2,543) 6,368 3,825 - 3,825
Loss for year (5,054) (33,125) (38,179) (1,502) (39,681)
Reporting segments assets 348,580 192,565 541,145 9,605 550,750
Reporting segments liabilities 155,593 30,503 186,096 17,441 203,537
Depreciation and impairments 254 8 262 - 262
3. Segmental information (continued)
Falkland Islands Corporate Total Greater Mediterranean Total (Continuing and Discontinued)
(Continuing) (Discontinued)
Year ended 31 December 2024 $'000 $'000 $'000 $'000 $'000
Cost of sales - - - 1,685 1,685
Gross profit - - - 1,685 1,685
Exploration and evaluation expense (393) - (393) - (393)
Administrative expenses - (3,330) (3,330) (130) (3,460)
Charge for share based payments - (76) (76) - (76)
Foreign exchange gain - 170 170 - 170
Results from operating activities and other income (393) (3,236) (3,629) 1,555 (2,074)
Other income - 79,802 79,802 - 79,802
Other expenses - (1,024) (1,024) - (1,024)
Finance income - 1,927 1,927 - 1,927
Finance expense (285) (11) (296) (302) (598)
Profit before tax (678) 77,458 76,780 1,253 78,033
Tax (22,300) (8,121) (30,421) - (30,421)
Profit for year (22,978) 69,337 46,359 1,253 47,612
Reporting segments assets 271,110 83,224 354,334 1,203 355,537
Reporting segments liabilities 84,559 8,322 92,881 14,279 107,160
Depreciation and impairments 393 19 412 - 412
4. Exploration and evaluation expenses
2025 2024
$'000 $'000
Exploration and evaluation assets written off (see note 15) 254 393
254 393
5. Administrative expenses 2025 2024
$'000 $'000
Directors' remuneration excluding benefits and pensions (see note 6) 1,980 844
Other employees' salaries 1,858 1,293
National insurance costs 2,808 1,027
Pension costs 187 172
Employee benefit costs 61 62
Total staff costs 6,894 3,398
Amounts reallocated (550) (1,147)
Total staff costs charged to administrative expenses 6,344 2,251
Auditors' remuneration (see note 7) 413 212
Other professional fees 2,125 416
Other 1,134 733
Depreciation 8 19
Amounts reallocated (254) (301)
9,770 3,330
The average number of full time equivalent staff employed during the year was
7 (2024: 7). As at the year end the Group employed (including part time) 9
staff, 7 of which were in the UK and 2 in Italy.
Amounts reallocated relate to the costs of staff and associated overhead in
relation to non administrative tasks. These costs are allocated to relevant
expenses or capitalised as part of the intangible exploration and evaluation
assets as appropriate.
6. Directors' remuneration
2025 2024
$'000 $'000
Executive salaries 1,688 585
Company pension contributions to money purchase schemes & pension cash 66 62
allowance
Benefits 15 13
Non-executive fees 292 259
2,061 919
The total remuneration of the highest paid director was:
2025 2024
£'000 £'000
Annual salary and bonuses 1,299 458
Money purchase pension schemes & pension cash allowance 50 49
Benefits 6 5
1,355 512
Interest in outstanding share options, LTIPs and SARs, by director, are also
separately disclosed in the directors' remuneration report.
7. Auditors' remuneration
2025 2024
$'000 $'000
Fees payable to the Company's auditors for the audit of the Company's annual 357 186
financial statements
Fees payable to the Company's auditors and its associates for other services:
Audit of the accounts of subsidiaries 56 26
413 212
8. Charge for share based payments
The charge for share based payments relate to options granted to employees of
the Group.
2025 2024
$'000 $'000
Charge for option scheme 146 76
146 76
Option scheme and Long term incentive plan
Various options have been granted in historic periods. Vesting dates and
exercise prices are detailed in the table below and commentary thereto.
LTIP awards relate to a historic scheme and current year grants. During the
year 2,177,456 options were granted. The awards are structured as nominal cost
options and, subject to meeting specific performance criteria, will normally
vest on future dates. 887,931 of these options were granted to the CEO, and
will be subject to an additional one year holding period after vesting.
The percentage of awards which will vest is dependent on total shareholder
return ("TSR") measured over a three year period ending on 30 June 2028 .
Performance measurement for these awards will be based on the Company's
average share price with the percentage of awards which will vest will being
dependent on TSR between these points. The options were valued using a Monte
Carlo model and the TSR performance condition is classed as a market-based
performance condition which is factored in to the valuation as per IFRS 2.
The following movements occurred during the year:
Issue date Vesting date Exercise price Expiry date At 31 December Granted Exercised At 31 December
2024 2025
Option Scheme
18 May 2020 Vested £0.01 18 May 2030 5,258,889 - - 5,258,889
18 May 2020 Vested £0.0625 18 May 2030 15,350,000 - (2,250,000) 13,100,000
25 Jan 2023 Variable** £0.07 25 Jan 2033 4,500,000 - - 4,500,000
25,108,889 - (2,250,000) 22,858,889
Long Term Incentive Plan
16 Jun 2017 Vested £nil 16 June 2027 2,352,000 - (960,000) 1,392,000
31 Jul 2019 Vested £nil 31 July 2029 2,337,501 - (687,500) 1,650,001
30 Sept 2025 01 Jul 2028 £0.01 30 Sept 2035 - 2,177,456 - 2,177,456
4,689,501 2,177,456 (1,647,500) 5,219,457
** These options vest in three tranches of 1.5 million each at project sanction, first oil, and project completion. The value of these options was $500,000 and made with reference to services received. The cost of the options was offset against the liability in relation to the service provided.
9. Foreign exchange movement 2025 2024
$'000 $'000
Other foreign exchange movements 2,981 170
Total net foreign exchange gain 2,981 170
10. 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 Specialist Fund.
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 contractual arrangements in place. 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 the
Monetisation Agreement as a financial asset at fair value through profit or
loss.
In the period the fair value of the Monetisation Agreement reduced from $58.2m
to $22.1m resulting in an overall loss through a combination of changes in
fair value and foreign exchange of $36.1m 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 receipts under Tranche 2 is now $nil.
- The likelihood of receipts under Tranche 3 have now
increased as they are 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 was recognised as a receivable at 30
June 2025, which was subsequently received in August 2025.
Management considered the terms of the insurance policy and determined that
the Group does not have the unconditional right to avoid delivering cash and
hence a financial liability should be recognised under IFRS 9. As such the
liability should be fair valued on initial recognition and subsequently
through profit and loss. The fair value of the insurance liability has been
estimated on the basis of probability weighted expected cash flows using the
same inputs as the fair value of the Tranche 3 proceeds as it represents 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.
Financial impact
The impact of the above on the income statement and balance sheet is set out
below.
Income statement
2025 2024
$'000 $'000
Other income
Insurance proceeds received 35,179 -
Monetisation Agreement - fair value movement - 79,802
Total other income 35,179 79,802
2025 2024
$'000 $'000
Other expenses
IFRS 9 liability for repayment of insurance proceeds (21,645) -
Insurance policy cost (3,906) (232)
Other costs (1,301) (792)
Monetisation Agreement - fair value movement (42,874) -
Total other expenses (69,726) (1,024)
Balance sheet
2025 2024
$'000 $'000
Assets
Monetisation Agreement - fair value (non current assets Financial asset) 22,148 -
Monetisation Agreement - fair value (included in other receivables note 17) - 58,228
Insurance prepayment (included in other receivables note 17) - 3,906
Non-current liabilities
Insurance liability - potential repayment of proceeds (other payables note 19) (21,645) -
Reconciliation of movements on Monetisation Agreement fair value
2025 2024
$'000 $'000
Monetisation Agreement - fair value - opening 58,228 -
Fair value movement (41,682) 81,124
Cash received - (20,556)
FX impact 5,602 (2,340)
Monetisation Agreement - fair value - closing 22,148 58,228
Cash movements
The majority of movements in the year are non cash, with only the Insurance
Proceeds received and Other costs actually pertaining to cashflows in the
current year.
Sensitivity
Management believe in the merits of the case but recognise that no outcome is
certain. As a result, assumptions and judgements are required in the
consideration of probability, timing, and of the value for the recognition of
other income and expenses and associated assets and liabilities. In regard to
timing, the length of time to recover any amounts is uncertain, but management
note that the original arbitration process took circa 9 years, therefore
management does not expect any resolution in the near term. The impact of
increasing or decreasing the time to recover funds is detailed below in
sensitivity one, and is impacted by both the interest that accrues on the
award and the impact of discounting the award.
The valuation of the asset and liability are estimated using the same
underlying inputs. The valuation is a function of various inputs including;
the chance of success in proceedings, assumptions of value of future award
granted and received, and the time and cost to recover any award should it be
granted.
Given the repayment of the insurance proceeds is capped at an undiscounted
value of €31 million, any award below this amount would have an equal and
offsetting impact on the fair value of the asset and the liability, with no
material net effect on the income statement or net assets. Above an
undiscounted value of €31 million, any increases in the award amount
received by Rockhopper would result in a net benefit to the Group. The impact
of changes to the value of the award is detailed below in sensitivity 2. To
provide some context, under the Tranche 3 proceeds mechanics, had an amount
been received on the 31 December 2025 equivalent to the original Award plus
accrued interest this would have increased the net asset position by $21.1
million.
Sensitivity 1: Impact of discounting
Impact of increasing the time to recover the award by one year on net assets:
decrease in net asset position $13 thousand
Impact of decreasing the time to recover the award by one year on net assets:
increase net asset position $16 thousand
Sensitivity 2: Impact of fair value of Award
Impact on net assets in the event no award is received by Rockhopper: $0.5
million
Impact on net assets of decreasing the fair value of the award received by
Rockhopper by 5%: $0.5 million
Impact on net assets of increasing the fair value of the award received by
Rockhopper by 5%: $3.2 million
11. Finance income and expense 2025 2024
$'000 $'000
Unwinding of discounts on fair value of Monetisation Agreement (see note 10) 1,192 1,323
Bank and other interest receivable 894 604
Total finance income 2,086 1,927
Unwinding of discount on decommissioning provisions (see note 21) 83 91
Co-venture loan interest 2,173 203
Other 98 2
Total finance expense 2,354 296
12. Taxation 2025 2024
$'000 $'000
Current tax:
UK tax 1,012
Overseas tax - 1,840
Adjustment in respect of prior years 1,902 22,300
Total current tax charge 2,914 24,140
Deferred tax:
Overseas tax (6,739) 6,281
Total deferred tax (credit)/charge - note 22 (6,739) 6,281
Tax on (loss)/profit on ordinary activities (3,825) 30,421
The reasons for the difference between the actual tax charge for the year and
the standard rate of corporation tax applied to profits for the year are as
follows:
(Loss)/profit on ordinary activities before tax (42,004) 76,780
(Loss)/profit on ordinary activities multiplied at 24% (31 December 2024: 26%) (10,091) 19,963
Effects of:
Income and gains not subject to taxation - (15,750)
Expenditure not deductible for taxation 11,559 127
Losses utilised - (3,120)
Adjustments in respect of prior years 1,902 22,300
Deferred taxes (credit)/charge on temporary differences (6,739) 6,421
Other (including changes to, and differences in, tax rates) (456) 480
Current tax (credit)/charge for the year (3,825) 30,421
The total carried forward losses and carried forward pre trading expenditures
in the Falkland Islands potentially available for relief are as follows:
2025 2024
$'000 $'000
UK 71,405 85,631
Falkland Islands 638,034 640,979
Italy 52,077 42,568
Deferred tax assets are only recognised on losses carried forward to the
extent it is deemed probable that they will be utilised in the future. No
deferred tax asset has been recognised in respect of temporary differences
arising on losses carried forward, outstanding share options or depreciation
in excess of capital allowances where there is uncertainty in the timing of
profits and hence future utilisation. Losses carried forward in the Falkland
Islands includes amounts held within entities where utilisation of the losses
in the future may not be possible. For the entity that holds the Sea Lion
licences the total carried forward pre trading expenditures form the tax basis
in the capitalised asset. Because this is lower than the carrying amount, it
gives rise to a deferred tax liability (note 22) available for relief on
commencement of trade.
13. Discontinued operations
In October 2024, the Group announced the disposal, subject to conditions
precedent, of its 100% interest in Rockhopper Civita Limited which holds the
Group's remaining operations in the Greater Mediterranean geographical segment
("the disposal group"). The transaction had not completed at the year end, but
the assets and associated liabilities continue to be classified as held for
sale on the balance sheet. Under the terms of the transaction Rockhopper
Civita Limited must have €5.5 million in cash and cash equivalents on
transfer. The US$ 8,161 thousand of term deposits and cash and cash
equivalents disclosed below is equivalent to €6,951 thousand. Whilst
currently held in accounts in the name of Rockhopper Civita Limited
immediately prior to any transaction completion the Group would transfer any
excess cash funds over and above the agreed €5.5 million out of the entity.
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.
The results of the discontinued operations, which have been included in the
profit for the year, are the same as the Greater Mediterranean segment as
disclosed in Note 3.
Completion of the disposal of the Group's Italian operations remains subject
to regulatory approval from the Italian regulator. The Group continues to
engage with the regulator and has provided further information as required. To
allow sufficient time for the approval process to conclude, it was agreed by
both parties to extend the long‑stop date in the SPA to 30 June 2026.
Cash flows from discontinued operations
2025 2024
$'000 $'000
Net cash from operating activities 111 (312)
Net cash from investing activities (225) (88)
Net cash from financing activities - -
The costs of disposal of Rockhopper Civita Limited are expected to be
substantially less than the carrying amount of the related net liabilities and
accordingly no impairment losses have been recognised on the classification of
these operations as held for sale. The major classes of assets and liabilities
comprising the operations classified as held for sale are as follows:
2025 2024
$'000 $'000
Exploration and evaluation assets 666 441
Other receivables 778 745
Term deposits 6,340 -
Cash and cash equivalents 1,821 17
Assets classified as held for sale 9,605 1,203
Other payables 1,836 1,692
Provisions 15,605 12,587
Liabilities associated with assets held for sale 17,441 14,279
14. Basic and diluted (loss)/profit per share 2025 2024
Number Number
Weighted average number of Ordinary Shares 648,238,819 644,879,070
Weighted average of shares held in Employee Benefit Trust (2,505,093) (1,304,500)
Weighted average number of Ordinary Shares for the purposes of basic earnings 645,733,726 643,574,570
per share
Effects of Share options and warrants 13,801,401 10,498,279
Weighted average number of Ordinary Shares for the purposes of diluted 659,535,127 654,072,849
earnings per share
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 (38,179) (1,502) (39,681) 46,359 1,253 47,612
share
The weighted average number of Ordinary Shares takes into account those shares
which are treated as own shares held in trust. As at the year end the Group
had 2,505,093 Ordinary shares held in an Employee Benefit Trust (2024:
1,304,500) which have been purchased to settle future exercises of options.
3.0 million options (2024: 4.5 million) have not been included in the
calculation of diluted EPS because their exercise is contingent on the
satisfaction of certain criteria that had not all been met at 31 December
2025. The total number of options in issue is disclosed in note 8.
As the Group is reporting a loss in the current year 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.
15. Exploration and evaluation assets
Falkland Greater
Islands Mediterranean Total
$'000 $'000 $'000
At 31 December 2023 256,847 381 257,228
Additions 14,656 78 14,734
Written off exploration costs (393) - (393)
Foreign exchange movement - (18) (18)
Reclassified to assets held for sale - (441) (441)
At 31 December 2024 271,110 - 271,110
Additions 58,382 - 58,382
Written off exploration costs (254) - (254)
Foreign exchange movement - - -
Reclassification to tangible fixed assets (development and production assets) (329,238) - (329,238)
At 31 December 2025 - - -
Falkland Islands Licences
The amounts for intangible exploration and evaluation assets represent active
exploration and evaluation projects. The additions during the year of US$58.1
(2024 $14.7) million relate to the Sea Lion development.
Reclassification of Sea Lion E&E Asset to Tangible Fixed Assets
During the year ended 31 December 2025, the Company reclassified the carrying
value of its Exploration and Evaluation assets in respect of the Sea Lion oil
field, located in the North Falkland Basin, to tangible fixed assets
(property, plant and equipment). The reclassification was effected on 31
December 2025 at a carrying value of $329.2 million (2024: $nil), being the
date that commercially viability was obtained through the successful
placement.
The reclassification reflects Management's conclusion that, as at 31 December
2025, the technical feasibility and commercial viability of extracting the
mineral resource from the Sea Lion field are demonstrable. In reaching this
conclusion, Management had regard to the following key milestones, each of
which was achieved during the period leading up to and including 31 December
2025:
• Independent Competent Person's Report (CPR) - Proved Reserves;
• Approval of Field Development Plan by the Falkland Islands
Government:
• Final Investment Decision (FID):
• Securing of Debt Financing:
• Securing of Equity Financing - Parent Company Placing
Basis for Selection of Reclassification Date
Management determined that 31 December 2025 is the appropriate date of
reclassification, being the earliest date on which all criteria required to
demonstrate technical feasibility and commercial viability were simultaneously
satisfied. Whilst a number of the above milestones were achieved prior to 31
December 2025, Management concluded that commercial viability was not fully
demonstrable until the Company's equity funding requirement had been met in
full. The receipt of Placing proceeds by the parent company on 31 December
2025 represented the final element of the funding structure and removed the
residual funding risk that had, in Management's judgement, previously
prevented commercial viability from being regarded as demonstrable in its
entirety.
Impairment Assessment
In accordance with IFRS 6, Management performed an impairment assessment of
the Sea Lion E&E assets immediately prior to reclassification. No
impairment loss was identified prior to reclassification - further details of
the impairment assessment are set out in Note 16 -Property, plant and
equipment. As a result, the full carrying value of the E&E assets of
$329.2 million was transferred to tangible fixed assets as at 31 December
2025. Written off exploration costs during the year US$254 thousand (2024: US$
393 thousand) relate to costs associated with the licences to the south of
those included in the current Field Development plan. In 2020, costs of
US$222.5 million were written off in respect of these licences as they did not
have a committed capital plan. Given there is still no committed capital
investment plan Management does not consider there to be an indication of
impairment reversal.
.
16. Property, plant and equipment
Development and production assets Other assets
Total
$'000 $'000 $'000
Cost
At 1 January 2025 - 157 157
Additions - - -
Reclassification from intangible fixed assets 329,238 - 329,238
At 31 December 2025 329,238 157 329,395
Depreciation and impairment
At 1 January 2025 - (147) (147)
Depreciation charge in the year - (8) (8)
At 31 December 2025 - (155) (155)
Carrying value
At 31 December 2025 329,238 2 329,240
At 31 December 2024 - 10 10
Sea Lion Development Asset
The Sea Lion development asset of $329.2 million (2024: $nil) represents the
carrying value of E&E assets reclassified from exploration and evaluation
assets during the year ended 31 December 2025 (see Note 15 - Exploration and
Evaluation Assets). The asset comprises all exploration, appraisal, and
pre-development expenditure capitalised in relation to the Sea Lion field
since the date of discovery.
The Sea Lion development asset is not yet subject to depreciation as the field
had not commenced production as at 31 December 2025. Depreciation will be
charged on a unit-of-production basis, calculated by reference to the ratio of
production in the period to the estimated total Proved Developed Reserves of
the field, commencing from the date of first production
Impairment Review
Management performed an impairment assessment of the Sea Lion development
asset as at 31 December 2025 in accordance with IAS 36 - Impairment of Assets.
The Sea Lion CGU, comprising RKH's 35% working interest in the Sea Lion
development project located in licences PL032 in the North Falkland Basin, is
required to be assessed for impairment prior to reclassification from
intangible E&E assets to tangible D&P assets following the Final
Investment Decision taken in December 2025. The recoverable amount was
determined on a Value In Use (VIU) basis, using a discounted cash flow
approach in line with how market participants would value the asset (and
corresponding to how the Group would value similar assets), with the estimate
therefore being classified as Level 3 in the fair value hierarchy due to a
number of unobservable inputs used in the estimate. Costs of disposal were
considered to be immaterial for the purposes of the impairment test. The key
assumptions used in the valuation were as follows:
For oil price, RKH has used a long-term flat Brent oil price based on market
consensus, adjusted for a fixed quality differential. Production are based on
the independent reserves assessment conducted by NSAI, with volumes reflecting
the 2C resource for the North Development Area Phase 1. Cost estimates were
consistent with those used in the Senior debt banking model. The pre-tax
discount rate applied is 8.08% (WACC). Sensitivity analysis has been performed
on four scenarios: (i) a 10% reduction in oil price; (ii) reducing production
to 90% of the 2C estimate; (iii) increasing the discount rate by 1%; and (iv)
a 10% increase in capital expenditure. In none of those cases does an
impairment arise.
17. Other receivables 2025 2024
$'000 $'000
Current
Receivables 460 193
Prepayments 18,026 3,906
Other 223 58,231
18,709 62,330
As at 31 December 2025 prepayments relate to prepaid costs including prepaid
capital expenditure and loan arrangement fees relating to a senior debt
facility entered into subsequent to year end. Financing fees related to the
facility will be capitalized and amortised over the term of the debt facility.
As at 31 December 2024 other receivables included US$58,228 thousand in
relation to the fair value of the monetisation agreement, in the current year
this has been presented as a Non current asset due to the expected timing of
realization following annulment of the original award during 2025 (note 10).
18. Term deposits
2025 2024
$'000 $'000
Maturing after the period end
Within three months 13,429 19,969
13,429 19,969
Term deposits relate to amounts placed on fixed term deposit with various A
rated deposit banks.
19. Other payables and accruals
Current liabilities 2025 2024
$'000 $'000
Accounts payable 102 225
Accruals 48,138 6,289
Other creditors 556 2
48,796 6,516
All amounts are expected to be settled within twelve months of the balance
sheet date and so the book values and fair values are considered to be the
same. Accruals include $38.8 million (2024: $4.7 million) amounts owed to
Navitas in relation to Sea Lion. These amounts are expected to be invoiced and
then either settled 100% using the pre-FID loan facility or 2/3 to the
post-FID loan facility as appropriate.
Non current liabilities 2025 2024
$'000 $'000
Other payables 21,645 -
Co-venturers loan 52,493 15,354
74,138 15,354
Other payables amounts reflect the recognition of the potential insurance
proceeds repayment resulting from any future receipts under the Monetisation
Agreement in the year (note 10).
The movement on Co-venturers loan can be analysed as follows:
$'000
Opening balance 15,354
Proceeds from loans (cash) 9,135
Proceeds from loans (non-cash) 25,831
Accrued interest (non-cash) 2,173
52,493
20. Tax payable 2025 2024
$'000 $'000
Current tax payable 1,012 1,806
Non current tax payable 20,873 22,300
Total tax payable 21,885 24,106
On 9 December 2025, the Company and the Falkland Islands Government ('FIG')
entered into a final settlement agreement (the 'Settlement Deed') in respect
of an uncertain tax liability. The uncertainty arose from capital gains taxes
assessed by FIG on the farm-out of interests in the Sea Lion field to Premier
Oil plc in 2012 (the '2012 Farm-Out').
The Settlement Deed also operates to settle any tax liability arising in
connection with the farm-out to Navitas Petroleum in 2022 (the '2022
Farm-Out').
Payment Terms
The Settlement Deed provides for the Company to pay FIG a total of GBP 30
million on an undiscounted basis, payable in instalments as follows:
Instalment Amount (GBP) Timing / Condition
1 GBP 1 million At signing of the final settlement agreement (paid December 2025)
2 GBP 2 million At Phase 1 sanction / Financial Close (paid December 2025)
3 GBP 1 million 30 calendar days from First Oil (the 'Payment Date')
4 GBP 2 million First anniversary of the Payment Date
5 GBP 3 million Second anniversary of the Payment Date
6 GBP 7 million Third anniversary of the Payment Date
7 GBP 7 million Fourth anniversary of the Payment Date
8 GBP 7 million Fifth anniversary of the Payment Date
Total GBP 30 million (undiscounted)
The Settlement Deed contains the following provisions in respect of the timing
of payments:
- Early payment: the Company is entitled to
settle any instalment before its contractual due date, attracting a discount
of 10% per annum calculated on the amount settled early.
- Late payment: interest accrues on any
overdue instalment at a rate of 10% per annum from the contractual due date
until the date of actual payment.
(a) Measurement - Discounting of Financial Liability
First Oil from the Sea Lion Phase 1 development is expected in the first half
of 2028, as such the liability has been discounted.
The discount rate applied is 10% per annum, being the rate inherent in the
Settlement Deed at which the Company may prepay instalments.
Applying a discount rate of 10% per annum to the scheduled instalment cash
flows, the present value of the remaining liability as at 31 December 2025 is
GBP 15.5 million. Translated at the closing exchange rate at 31 December 2025,
the carrying value of the tax settlement creditor is $20.9 million.
(b) Adjustment in Respect of Prior Periods
The carrying value of the tax creditor recognised at 31 December 2024 was
$22.3 million. Following the execution of the Settlement Deed and revision of
the payment profile and applicable discount rate, the carrying value has been
remeasured to US$20.9 million. The resulting credit of US$1.4 million is
recognised as an adjustment in respect of prior periods within the current tax
charge for the year ended 31 December 2025. This has been offset by the
initial payments paid during the year of equivalent to US$4.0 million leading
to a net current year tax charge of US$2.5 million.
(c) Balance Sheet Classification
The remaining tax settlement liability of $20.9 million is classified in full
as a non-current liability at 31 December 2025. No instalments under the
Settlement Deed are contractually due until 30 calendar days after First Oil,
which is not expected until 2028. As no amounts fall due within 12 months of
the balance sheet date, the entire carrying value is presented within
non-current liabilities.
Key Assumptions and Sensitivities
The principal assumption underlying the present value calculation is the
expected First Oil date. A change in the expected timing of First Oil would
affect the payment dates of instalments 3 to 8 and, consequently, the present
value of the liability.
The 10% per annum discount rate is considered appropriate as it is the rate
inherent in the Settlement Deed. Changes in prevailing market rates would not
affect the measurement of the liability as the effective interest rate is
fixed at inception.
21. Provisions Decommissioning
provision 2025 2024
$'000 $'000 $'000
Brought forward 1,600 1,600 19,132
Changes in estimate 457 457 (5,400)
Amounts arising in the year - - 3
Unwinding of discount 83 83 392
Foreign exchange - - 60
Reclassified to liabilities held for sale - - (12,587)
Carried forward at year end 2,140 2,140 1,600
The decommissioning provision relates to the Company's temporary dock facility
in the Falkland Islands.
Judgements are made based on the long term economic environment around
appropriate inflation and discount rates to be applied as well as the timing
of any future decommissioning. In the Falkland Islands costs are most likely
to be in $US or GB£. Management consider the UK economic environment is best
when informing these judgements due to probable contractor base likely to be
used.
The Company believe it appropriate to use the following inflation and discount
rates;
2025 2024
Inflation 2.0% 1.6%
Discount 4.9% 5.2%
Period (years) 28 30
The changes in estimate in the year all relate to the change in relative
discount and inflation rates.
Decommissioning costs are uncertain and management's cost estimates can vary
in response to many factors, including changes to the relevant legal
requirements, the emergence of new technology or experience at other assets.
The expected timing, work scope and amount of expenditure may also change.
Therefore, significant estimates and assumptions are made in determining the
costs associated with the provision for decommissioning. The estimated
decommissioning costs are reviewed annually, and the results of the most
recent available review used as a basis for the amounts in the Consolidated
Financial Statements. Provision for environmental clean-up and remediation
costs is based on current legal and contractual requirements, technology and
price levels. However, actual decommissioning costs will ultimately depend
upon future market prices for the necessary decommissioning works required
which will reflect market conditions at the relevant time.
The estimated costs associated with the decommissioning works are those that
are likely to have a material impact on the provision. Given the facilities in
the Falkland Islands are to be utilised during the Sea Lion development any
changes in the provision would have been capitalised in the intangible asset.
A 10% increase in these estimates would increase both the provision and the
tangible assets in the year by US$214,000. Similarly, a 10 per cent reduction
in these estimated costs would decrease both the provision and the intangible
assets in the year by US$214,000.
22. Deferred tax
The following are the major deferred tax liabilities and assets recognised by
the group and movements thereon during the current and prior reporting period.
Accelerated tax depreciation Revaluation of financial assets Tax losses Total
$'000 $'000 $'000 $'000
At 1 January 2024 (39,137) (16,779) 10,611 (45,305)
Foreign exchange - (1,553) 982 (571)
Movement in period - 18,332 (11,593) 6,739
At 31 December 2025 (39,137) - - (39,137)
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax liabilities
and when they relate to income taxes levied by the same taxation authority and
the group intends to settle its current tax assets and liabilities on a net
basis.
Total carried forward losses and carried forward pre-trading expenditures
available for relief on commencement of trade at 31 December 2025 are
disclosed in note 12 Taxation. Deferred tax assets are only recognised in
relation to these losses to the extent it is probable that future suitable
taxable profits will be available against which these losses can be utilised.
23. Share capital
2025 2024
$'000 Number $'000 Number
Authorised, called up, issued and fully paid: Ordinary shares of £0.01 each 12,209 847,316,741 9,455 640,578,764
2025 2024
Number Number
Shares in issue brought forward 640,578,764 620,229,436
Shares issued
- Issued on placing 201,102,976 -
- Issued on exercise of warrants and share options 2,250,000 20,349,328
- Issued to EBT 3,385,001 -
Shares in issue carried forward 847,316,741 640,578,764
The shares issued to the EBT were to ensure that the EBT had sufficient shares
to issue to the holders of the nil cost LTIP options.
During the year Rockhopper raised funds by way of a Placing and Subscription,
in each case at an issue price of 53 pence per Unit (the "Issue Price"). Each
Unit offered comprises one New Ordinary Share and, for every four New Ordinary
Shares subscribed for, one Warrant. Each Warrant gives the holder the right to
subscribe for one new Ordinary Share at a price of 80 pence per Ordinary Share
(the "Strike Price").
The Placing utilised a cashbox structure and therefore the premium on the
ordinary shares and associated costs have in accordance with section 612 of
the Companies Act 2006 been recognised within the merger reserve. In relation
to the shares, $129.6m was raised of which $2.6m is classified as Share
Capital with the remaining balance in the Merger Reserve. The Warrants issued
totaled $12.5m and were recognised in Share options and warrants reserve. The
above are net of costs of $6.7m.
24. Reserves
Set out below is a description of each of the reserves of the Group:
Share premium Amount subscribed for share capital in excess of its nominal value.
Share options and warrants The share incentive plan reserve captures the equity related element of the
expenses recognised for the issue of options, comprising the cumulative charge
to the income statement for IFRS2 charges for share based payments less
amounts released to retained earnings upon the exercise of options. It also
includes the value of warrants that have been classified as Equity.
Own shares held in trust Shares held in trust by the Employee Benefit Trust which have been purchased
to settle future exercises of options.
Merger reserve The difference between the nominal value and the fair value of shares issued
on acquisition of subsidiaries.
Foreign currency translation reserve Exchange differences arising on consolidating the assets and liabilities of
the Group's subsidiaries are classified as equity and transferred to the
Group's translation reserve.
Special reserve The reserve is non distributable and was created following cancellation of the
share premium account on 4 July 2013. It can be used to reduce the amount of
losses incurred by the Parent Company or distributed or used to acquire the
share capital of the Company subject to settling all contingent and actual
liabilities as at 4 July 2013. Should not all of the contingent and actual
liabilities be settled, prior to distribution the Parent Company must either
gain permission from the actual or contingent creditors for distribution or
set aside in escrow an amount equal to the unsettled actual or contingent
liability.
Retained losses Cumulative net gains and losses recognised in the financial statements.
25. Capital commitments
As part of taking Final Investment Decision on Sea Lion Phase 1 the Group
approved a multi-year work programme and budget. As at 31 December 2025
capital commitments under that budget totaled US$579 million. Part of these
costs are to be funded through the Post-FID Loan arrangements with Navitas.
Under these arrangements Navitas fund 2/3 of the Group's share of post
sanction Sea Lion Phase 1 capital costs to the extent they are not covered by
the Senior Debt Facility.
In the prior year significant capital expenditure for at the end of the
reporting period but not recognised as liabilities were US$0.6 million
relating to the Company's intangible exploration and evaluation assets.
26. Related party transactions
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed.
Subsidiaries are listed in notes of the Company financial statements.
The remuneration of directors, who are the key management personnel of the
Group, is set out below in aggregate. Further information about the
remuneration of individual directors, including deferred salary and bonus
amounts, is provided in the Directors' Remuneration Report on pages 41 to 50.
Year ended Year ended
31 December 31 December
2025 2024
$'000 $'000
Short term employee benefits 2,061 918
Share based payments 50 48
2,111 966
Alison Baker, Senior Independent Director, sold a total of 50,000 ordinary
shares of £0.01 each in the Company ("Shares"). The sale of Shares completed
on 4 June 2025. Alison Baker retains 234,181 Shares in the Company,
representing of the 0.036% of the issued share capital of the Company.
27. Financial instruments - Fair values and risk management
A. Accounting classifications and fair values
The only assets classified at fair value through profit and loss is the
Agreement as disclosed in note 10 Other income and expenses. The only
liabilities classified as at fair value through profit and loss is the
Insurance Liability as disclosed in note 10 Other income and expenses.
B. Measurement of fair values
This section explains the judgements and estimates made in determining the
fair values of the financial instruments that are recognised and measured at
fair value in the financial statements. To provide an indication about the
reliability of the inputs used in determining fair value, the group has
classified its financial instruments into the three levels prescribed under
the accounting standards. An explanation of each level follows underneath.
Financial asset/liability Level Valuation technique/key inputs Significant unobservable input(s) Relationship and sensitivity of unobservable inputs
Monetisation Agreement and Insurance Liability (Note 10) 3 Most likely outcome, discounted cash flow Timing of cash flows, outcome of arbitration. Sensitivity analysis is provided in the note
Future cash flows based on expected award value, costs to recover and time to
recovery. These were then discounted at market observable rates.
C. Financial risk management
The Group has exposure to the following risks arising from financial
instruments:
· Market risk see Note 27 C i
· Credit risk see Note 27 C ii
· Liquidity risk see Note 27 C iii
· Capital risk see Note 27 C iv
i. Market rate risk
Foreign exchange risks: The Group is exposed to foreign exchange movements on
monetary assets and liabilities denominated in currencies other than US$. A
number of the Group's subsidiaries have a functional currency other than US$,
where this is the case the Group has an exposure to foreign exchange
differences with differences being taken to reserves.
The Group has cash and cash equivalents and term deposits of US$201.4 million
of which US$144.2 million was held in US$ denominations. The Group has
expenditure in GB£ and Euro and accepts that to the extent current cash
balances in those currencies are not sufficient to meet those expenditures
they will need to acquire them. The following table summarises the split of
the Group's assets and liabilities by currency:
Currency denomination of balance $ £ €
$'000 $'000 $'000
Assets
31 December 2025 498,212 19,165 33,372
31 December 2024 275,536 4,575 75,426
Liabilities
31 December 2025 135,491 28,624 39,421
31 December 2024 60,815 23,932 22,413
The following table summarises the impact on the Group's pre-tax (loss)/profit
and equity of a reasonably possible change in the US$ to GB£ exchange rate
and the US$ to euro exchange:
Pre tax (loss)/profit Total equity
+10% US$ rate -10% US$ rate +10% US$ rate -10% US$ rate
increase decrease increase decrease
$'000 $'000 $'000 $'000
US$ against GB£
31 December 2025 (945) 945 (945) 945
31 December 2024 (194) 194 (194) 194
US$ against euro
31 December 2025 (604) 604 (604) 604
31 December 2024 5,301 (5,301) 5,301 (5,301)
Interest rate risks: the Group's only external debt is the Pre and Post-FID
loan from Navitas. It is at a fixed rate of interest and the Group does not
account for this at FVTPL so a change in interest rate at the reporting date
would not affect profit or loss. Therefore exposure to interest rates is
limited to finance income it receives on cash and term deposits. The Group is
not dependent on its finance income and given the current interest rates the
risk is not considered to be material.
ii. Credit risk
The Group recharges partners and third parties for the provision of services.
Should the companies holding these accounts become insolvent then these funds
may be lost or delayed in their release. The amounts classified as receivables
as at the 31 December 2025 $459,000 (31 December 2024: $193,000).
Other receivables relates to the fair value of the Agreement to monetise the
Group's Award. The counter party to the Agreement is a specialist fund with
significant funds under management.
Credit risk relating to the Group's other financial assets which comprise
principally cash and cash equivalents and term deposits arises from the
potential default of counterparties. Investments of cash and deposits are made
within credit limits assigned to each counterparty. The risk of loss through
counterparty failure is therefore mitigated by the Group splitting its funds
across a number of banks.
iii. Liquidity risk
The Group monitors the liquidity position by preparing cash flow forecasts to
ensure sufficient funds are available. Further information can be found in the
going concern assessment contained in Note 1.5.
Maturity of financial liabilities
The table below analyses the Group's financial liabilities, which will be
settled on a gross basis, into relevant maturity groups based on the remaining
period at the balance sheet to the contractual maturity date. The amounts
disclosed in the table are the contractual undiscounted cash flows. The
Co-venturers loan balance of $52,493,000 (2024: $15,354,000) included in
non-current payables has been excluded from the analysis as its repayment is
to be made from the Sea Lion development. Whilst it is expected that the
project will be continue in the future there is no guarantee on timing so the
date of any repayment is yet to be determined.
More than Total contractual
Within 1 year 2 to 5 years 5 years cashflows Carrying amount
$'000 $'000 $'000 $'000 $'000
Other payables 48,796 - - 48,796 48,796
At 31 December 2025 48,796 - - 48,796 48,796
More than
5 years Total contractual
Within 1 year 2 to 5 years cashflows Carrying amount
$'000 $'000 $'000 $'000 $'000
Other payables 6,516 - - 6,516 6,516
At 31 December 2024 6,516 - - 6,516 6,516
iv. Capital risk
The Group manages capital to ensure that it is able to continue as a going
concern whilst maximising the return to shareholders. The capital structure
consists of cash and cash equivalents and equity. The board regularly monitors
the future capital requirements of the Group, particularly in respect of its
ongoing development programme. Further information can be found in the going
concern assessment contained in Note 1.5.
28. Events after the reporting period end
Subsequent to the reporting date, the Company completed an Open Offer to
Qualifying Shareholders, as announced on 22 December 2025. The Open Offer
closed for acceptances at 11.00 a.m. on 15 January 2026.
Valid acceptances were received for 101,956,821 Open Offer Shares,
representing a take‑up of approximately 773.1% of the 13,188,036 Open Offer
Shares available. Qualifying Shareholders received their full basic
entitlement, with excess applications scaled back on a pro rata basis in
accordance with the terms of the Open Offer.
The Open Offer raised gross proceeds of approximately £6.9 million
(approximately US$9.2 million) through the issue of 13,188,036 new ordinary
shares of 1 pence each. Admission of the Open Offer Shares to trading on AIM
occurred on 21 January 2026, at which date the Company's issued ordinary share
capital comprised 860,504,777 ordinary shares.
On the 20 May Navitas Petroleum LP ("Navitas" or the "Operator") provided an
update on Sea Lion development progress. Phase 1 remains on track for first
oil in H1 2028, with drilling scheduled to commence early 2027. The Aoka Mizu
FPSO (55k bopd gross; 19.25k bopd net to Rockhopper) will sail to its upgrade
shipyard by end of May, following conclusion of operations by its current
operator. Upgrade works have been relocated from the Middle East to Asia due
to the Iran conflict, adding c.US$45m to the development budget; Rockhopper's
net additional equity cost is c.US$5.25m, and the Company remains fully funded
for Phase 1.
Separately, Navitas has signed an MOU for an additional FPSO targeting
acceleration of subsequent phases, which could add a further 125k bopd gross
(43.75k bopd net to Rockhopper) of production capacity. No binding agreements
are in place.
1 (#_ftnref1) Proved Developed Producing reserves
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Copyright 2019 Regulatory News Service, all rights reservedRecent news on Rockhopper Exploration
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