Yesterday’s drilling result has vindicated Rockhopper’s (RKH) confidence in the Isobel Deep/Elaine complex and extended its success rate to 10/12. Drilling 4km and 350m downdip of Isobel-1, the well encountered 27m of net oil pay (within the Isobel Deep, Isobel and Emily reservoirs), no gas and no oil water contact. As a result, the company believes that the total oil column is in excess of 480m and is “highly likely to contain a commercially viable quantity of recoverable oil”. The company has previously talked about Isobel potentially unlocking over 500mmboe, more than the SeaLion development (c 375mmboe). The result firms up the logic of the merger with FOGL, after which Rockhopper would hold 64% of Isobel. The results should also give the partners a strong hand in farm-out negotiations. We look forward to updating our valuation more fully in the short term.
