Rockhopper has announced an acquisition of the Egyptian assets of Beach Energy for a headline figure of US$22m, and a 2P+2C metric of under US$4.5/boe (well below historical metrics in Egypt and North Africa). The assets include a 22% WI in a production concession (Abu Sennan), which is forecast to produce nearly 5mboe/d (gross) in 2015 and exploration acreage at the El Qa’a licence. The free cash flows are expected to pay back in 18-24 months and should provide enough to cover a large portion of G&A in coming years, as well as providing exploration prospectivity in excess of 100mmboe (possible 74mmboe in four wells). We have adjusted our valuation to account for the assumed acquisition completion and expenditure and arrive at a core NAV of 147p/share.
