Rockhopper Exploration has had a successful week, as their stock surged almost 30 per cent on news that its oil discovery in the Falklands was viable. Almost 18 hours after starting the flow of oil, it was determined that the well was capable of 2,000 barrels per day, with a maximum of 2,300 barrels. These barrel counts lived up to the prior expectations set by Rockhopper. With the well producing no poisonous gas, water or dangerous levels of carbon dioxide, it is now deemed commercially viable.
The well, known as Sea Lion, was originally drilled in both April and May. Any more time spent there was suspended after discovering net pay of 53 metres in an oil colum of 217 metres.
There is confidence within the company that better equipment will ultimately produce significantly higher amounts of barrels per day, compared to the initial testing.
Pierre Jungels, executive chairman of Rockhopper Exploration, commented on the Sea Lion well, saying: “This test has provided vital information which will allow us to move forward through appraisal, a key step in proving the reserves discovered. We believe that Sea Lion is the largest fan sandstone body in the North Falkland Basin and, given this successful flow test, that the Sea Lion discovery will be commercially viable.”
The British explorers have scored a major victory with the Sea Lion, as it is the first oil find of an exploration off the islands.
The company now plans on plugging the well until official extraction of oil begins.
The news of the viability quickly reached Rockhopper’s investors, as it was hailed as a “great day”.