Falklands : Hydrocarbons Daily Record (20/06/06)
Submitted by Falkland Islands News Network (Juanita Brock) 21.06.2006 (Article Archived on 05.07.2006)
The Executive Chairman of Rockhopper Exploration has made a statement in that company's annual report.
HYDROCARBONS DAILY RECORD: TUESDAY, 20 JUNE 2006
By J. Brock (FINN)
At 1800 LMT Tuesday, 20 June 2006 Light Sweet Crude dropped .03 cents and settled at $68.95 on the New York Mercantile Exchange and Brent Crude rose .56 cents to $68.67 per barrel on London’s ICE Futures Exchange.
TRENDS:
For the moment the heat is off Iran, with North Korea actually fuelling a long-range missile ready for test launch. News of more municipalities switching to green fuel has also helped to keep prices down. Another positive sign is that the Caterpillar Corporation has reported a healthy increase in the international sale of its diesel engines. This could increase demand for hydrocarbons worldwide. Supplies of gasoline in the United States are still increasing, while the weather remains relatively calm in the Gulf of Mexico.
THE MARKETS
FTSE 100:
The FTSE 100 jumped by 25.60 points to 5651.7.
DOW JONES AND NASDAQ:
Mixed messages from the housing sector as well as firm belief that the Fed will raise interest rates contributed to the Dow Jones Index and the NASDAQ figures posted today.
The Dow Jones Index rose 0.3% and settled at 10,974.84 and the NASDAQ fell 0.16% to close at 2,107.06.
DEVELOPING FACTORS:
EURASIA
Launching the South Caucasus Gas Pipeline (SCP) is less than five months away. Georgia is now striving to purchase more gas from this pipe at a reduced price. Delegates from Azerbaijan, Georgia and Turkey gathered in Tbilisi on June 20 to negotiate Georgia’s request on a sideline of the Eurasian Energy Security conference.
(Canada)
Corn dry milling is the hottest ticket in town in Canada. Nevertheless, big players—some with deep-pocket benefactors—are vying for parts in the next big show. From wood waste in Arkansas to crop residue in Idaho and Canada, the proverbial stage is being set for cellulosic ethanol production. Ethanol is usually mixed with gasoline – 15% ethanol and 85% gas are the normal measurements. In Brazil they use sugar cane to the same affect.
(United States)
Governor Brian Schweitzer and Mrs Nancy Schweitzer have filled up the tank on a Dodge pickup with ultra-clean diesel developed through a gas-to-liquids process using proprietary Fischer-Tropsch technology owned by Tulsa, Okla.-based Syntroleum. This liquefied natural gas has less sulphur content than diesel produced at refineries.
LATIN AMERICA
(Bolivia)
During early June, Bolivia's president Evo Morales broadened his campaign to transform his country's economic, political, social and cultural life by moving rapidly and confidently on several fronts to gain momentum for his version of the communitarian socialism that has gained support in Latin America since Venezuelan President Hugo Chavez launched his "Bolivari revolution."
(Falkland Islands)
Falklands Oil Stocks End of Day Price for the 20.06.06
Desire Petroleum down 0.5p or 1.5% on the day to stand at 33.75p
Falklands Oil and Gas down 0.5p or 0.4% on the day to stand at £115.p
Rockhopper Exploration up 0.5 or 2.1% on the day to stand at 24p
Border and Southern unchanged on the day to stand at 44p
CHAIRMAN’S STATEMENT FROM THE ROCKHOPPER EXPLORATION ANNUAL REPORT
Dear Shareholder,
Rockhopper Exploration was established in early 2004 to explore for oil in the North Falkland Basin. We currently have a 100% working interest in and are the Operator of four licences, PL023, PL024, PL032 and PL033, which between them cover approximately 5,800 km2. In addition, we have a 7.5% working interest in licences PL003 and PL004, which are operated by Desire Petroleum. In total, our net acreage position of over 5,900 km2 currently makes us the largest acreage holder in the North Falkland Basin.
Dr Pierre Jungels
We are currently in a period of relatively high oil prices and have seen a significant growth in exploration activity across the world. Access to high quality acreage is becoming increasingly difficult and expensive while high quality people and equipment are in high demand and short supply. Against this background, your Board has built up an acreage position of real prospectivity and value and has also been able to carry out a significant part of the work programme set out at the time of our listing on the Alternative Investment Market (AIM), with more work already timetabled for later this year.
Achievements
We completed a successful listing on AIM in August 2005, raising £15 million before expenses to undertake work on all of our licence areas. We specified at the time that we would conduct both 2D and 3D seismic acquisition programmes and consider using other exploration technologies in addition to fulfilling our commitment to drilling with Desire Petroleum.
The 2D programme has been completed on licences PL023 and PL024 and the 3D vessel is now secured for licences PL032 and PL033. CGG, one of the world’s leading marine seismic contractors, will undertake the survey. We have also completed two Controlled Source Electromagnetic (CSEM) surveys in order to give ourselves greater confidence in the prospects over which they were acquired. These are the first such surveys ever completed in the Falkland Islands. The results of these surveys will be fully integrated with all our other technical studies once they are available.
We have achieved a great deal in this first year against a background of increasingly difficult markets for services in the oil sector. We look forward to being able to present the full results of our new 2D and CSEM programmes later this year and the results of our significant 3D programme during 2007. At that point, we will need to consider our funding options should we confirm the presence of drillable targets in our acreage.
Summary
We remain positive about the prospectivity of the basin as a whole and of our acreage specifically. We believe a number of completely untested plays remain in the basin which give a better chance of success than the original drilling campaign in 1998. The technical work is progressing as anticipated at the time of the listing and the Board as a whole remains strongly supportive of the management team as we move closer to discovering the real potential of the basin.
We are working closely with Desire in moving towards drilling on licences PL003 and PL004 but have experienced a significant tightening in the worldwide market for drilling units.
Outlook
Once the results of the two CSEM surveys have been fully integrated into the seismic studies, our knowledge of the southern, undrilled part of the North Falkland Basin will be taken to a new level.
Processing the new 920km 2D seismic survey data is nearing completion. Once we have the processed data, we will focus on interpreting and integrating it into our existing knowledge of the area.
The next active step in our exploration will be the collection of the new 3D seismic survey in licences PL032 and PL033. Once the data has been acquired, processing and interpretation will carry the work programme into 2007.
The ultimate test of any exploration is, of course, drilling. To this end, not only do we have the 7.5% interest in PL003 and PL004, but we are working on our own 100% acreage with modern seismic techniques and CSEM in order to reduce risk before committing to a drilling programme. It is our intention to co-operate as fully as possible with other operators in the region in order to reduce costs and maximise not only knowledge and experience, but also the chance of success.
Dr Pierre Jungels CBE
Executive Chairman
5 June 2006
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