Falkland Islands

Oil Production Analysis

10%
Royalty
30%
Discount Factor
60%
Interest Rate
Tax

Capex Phasing
end yr -2
end yr -1
end yr - 0

2014
-2
Production - Daily
Production - Annual
Production - Cumulative

kbopd
MMBO/yr
MMBO

Revenue

$M

Capex - Facilities
$M
Capex - Wells
$M
Capex - Total
$M
Interest
$M
Cum Interest
Capital Repayments
$M
Capital Repayments (Cum) $M
Opex (fixed and variable)
$M
Annual Cost
$M
Historical Costs
$M
Recovered
$M
Carried Over
$M
Royalty
$M
Revenue
$M
Cost Oil "surplus to Profit Oil"$M
Profit Oil
$M
Profit Oil Split
$M
Tax (Corporation)
$M
Net FOC
$M
Discount Factor
Discounted
$M
Annual Opex
Royalty
Tax
Net Profit (RKH)
Gov Revenue
Gov Revenue

$/bbl
$m
$m
$m
$m
%

PV $/bbl
NPV10 $/bbl
IRR %
DCF (Gross) $M
DCF(Net to RKH) $M
RKH - DCF/Share $

2015
-1

2016
0

2017
1
30
11.0
11
767

165.0

495.0

165.0
13.2
13
18
18

495.0
51.3
65
75
94

990.0
158.1
1,148.1
137.1
202
210
304

32
200
232

127

347

358

706

32

127

347

-127

-347

2023
7
49.1
17.9
151
1,417

1,204

474.2
474.2
158.3
223
280
584
259
698

948.4
948.4
211.7
434
409
993
310
931

179.0
614
442
1,435
387
1,007

143.7
757
477
1,911
387
1,007

105.5
863
483.3
2,395
356
945

66.9
930
427
2,822
330
824

63.9
994
241
3,062
308
612

75.9
1,069
169
3,231
289
534

1,403
69

1,403
120
282
-

200
1,012
1,012

208
1,092
1,092

347

Unrisked Risked
20.43
9.44
5.62
51.5%
2,273
1,352
2,273
1,352
11.84
7.04
7.64
4.54

1,500 $m
500 $k/day
40 $m/well
150 $m
7 $/bbl
6.9 $/bbl
6.6 $/bbl
182.5 $m/yr
7 $/bbl

2022
6
57.8
21.1
134
1,667

69.0
9%

3,500 bopd
15%
7.159 MMbo
240.8 MMbo
34 wells
5.9 wells
20,000 bwpd
85.85 MMbw/well
Full Void replacement
505.28 MMbw

2021
5
68.0
24.8
112
1,961

23.7
69.0
127

2020
4
80
29.2
88
2,307

94%

32

2019
3
80
29.2
58

POO Forecasts ($/bbl)

year
WTI
FI Price
1
75
70
2
78
73
3
81
76
4
84
79
2024
2025
2026
8
9
10
41.8
35.5
30.2
15.2
13.0
11.0
167
180
191

2,219

-32

2018
2
50
18.3
29

15%
100%
7 yrs

1,332

Wells
depletion
Oil/well
Reserves
Wells - Producers
Wells Injectors

Subsea
Topside (lease)
Drilling
CALM Buoy
opex (excl FPSO)
CAPEX/bbl
Drillex
OPEX (Fixed)
Opex (variable)

Oil Field Development:- Sea Lion

9%
CAPEX
6.9 $/bbl
Decline
12% DRILLEX
6.6
Cost Oil Recovery
8%Opex (var)
7 $/bbl
Loan Term
30% Opex (fixed) 182.5 $m/yr

1
2
3
4
5
6
7
8
9
10
11
12

200 $M
100%
70%
85%
5.00 $
1.55 $/

2027
11
25.6
9.4
200

2028
12
21.8
8.0
208

2029
13
18.5
6.8
215

2030
14
15.7
5.7
220

2031
15
13.4
4.9
225

2032
16
11.4
4.2
230

2033
17
9.7
3.5
233

2034
18
8.2
3.0
236

2035
19
7.0
2.6
239

2036
20
5.9
2.2
241

1,024

870

740

629

534

454

386

328

279

237

202

171

1,069

1,069

1,069

1,069

1,069

1,069

1,069

1,069

1,069

1,069

1,069

1,069

3,231
273
273

3,231
260
260

3,231
248
248

3,231
238
238

3,231
230
230

3,231
223
223

3,231
217
217

3,231
212
212

3,231
207
207

3,231
204
204

3,231
200
200

3,231
198
198

176
839
839

150
693
693

127
677
677

108
562
562

92
658
658

78
532
532

67
425
425

57
334
334

48
256
256

41
191
191

35
135
135

30
87
87

25
47
47

21
12
12

18
17
17

239
15
42
-

304
708
75%
534

328
764
67%
514

252
587
60%
353

208
485
54%
260

203
474
48%
227

169
393
43%
168

197
461
38%
176

160
372
34%
127

127
297
30%
90

100
234
27%
63

77
179
24%
44

57
133
22%
29

40
94
19%
18

26
61
17%
11

14
33
15%
5

4
9
14%
1

17
12%
2

42
11%
5

17.0
119.9
84
197
204.4
15%

13.3
199.7
304
708
503.3
23%

13.3
207.6
328
764
535.1
23%

14.4
176.5
252
587
428.2
22%

15.7
150.0
208
485
357.8
21%

17.2
127.5
203
474
330.5
23%

19.0
108.4
169
393
277.0
23%

21.1
92.1
197
461
289.6
28%

23.6
78.3
160
372
237.9
27%

26.5
66.6
127
297
194.0
26%

29.9
56.6
100
234
156.7
25%

34.0
48.1
77
179
125.0
23%

38.7
40.9
57
133
98.0
22%

44.3
34.7
40
94
75.1
19%

50.9
29.5
26
61
55.6
17%

58.7
25.1
14
33
39.1
14%

67.8
21.3
4
9
25.0
11%

78.5
18.1
17
18.1
9%

91.2
15.4
42
15.4
9%

$M
18,726
9,773
4,918
1,685
2,350
4,035

per Day Cum Oil

3,500
1.252
2,975
2.316
2,529
3.221
2,149
3.989
1,827
4.643
1,553
5.199
1,320
5.671
1,122
6.072
954
6.413
811
6.703
689
6.950
586
7.159

%
52.2%
26.3%
9.0%
12.5%
21.5%
Water
525
971
1,351
1,673
1,947
2,180
2,378
2,546
2,689
2,811
2,914

Cum Water
0.188
0.535
1.018
1.617
2.313
3.093
3.944
4.854
5.816
6.822
7.864

fluids
cum fluids
3,500
1.252
3,500
2.504
3,500
3.756
3,500
5.008
3,500
6.260
3,500
7.512
3,500
8.764
3,500
10.016
3,500
11.268
3,500
12.520
3,500
13.771
3,500
15.023

2037 Totals
21
241

18,726
1,650
1,581
3,231
1,207

6.85 $/bbl
6.57 $/bbl
13.42 $/bbl

3,231

84
197
84%
166

Revenue
Costs
RKH
Royalty - Gov
Tax - Gov
Total - Gov
yr

Historical Costs
Rockhopper Net Share
Technical Risk
Political Risk
WTI Discount
Exchange Rate

RKH Share Price unrisked () : Discount Factor (%) vs WTI ($/bbl)

Total CAPEX
7.64
10%
11%
12%
13%
Yr 1 Opex
70
7.05
6.61
6.21
5.84
RHK Farm Down
75
8.60
8.10
7.64
7.21
RKH Share of CAPEX/Drillex
80
10.10
9.54
9.02
8.53
Working Capital
85
11.60
10.97
10.39
9.85
Appraisal Drilling
Additional near term dilution
Sea Lion NPV $/bbl: Discount Factor (%) vs WTI ($/bbl)
Shares - now
9.44
10%
11%
12%
13%
Shares - future
70
8.71
8.17
7.68
7.22
Money raised
75
10.63
10.01
9.44
8.91
80
12.48
11.79
11.14
10.54
85
14.34
13.56
12.84
12.17
Sea Lion NPV
9.44
6.0
7.0
8.0
9.0

$/bbl: Corpo Tax Rate (%) vs CAPEX ($/bbl)

30%
35%
40%
45%
9.91
9.05
8.19
7.33
9.35
8.53
7.71
6.89
8.75
7.96
7.17
6.37
8.15
7.38
6.62
5.86

Sea Lion NPV $/bbl: Well Cost ($m) vs FPSO

9.44
450
500
550
30.0
10.88
10.46
10.03
40.0
9.86
9.44
8.99
50.0
8.83
8.39
7.94
60.0
7.78
7.33
6.89

5,335
9,773

1,685

2,350
4,918
2,273

1,685
2,350
4,918
4,035

3,231 $M
259 $M
50%
1,615 $M
200 $M
120 $M
28%
192 million
245 million
213 m
320 $m

RKH Share Price (+ dilution) unrisked () : Discount Factor (%) vs WTI ($/bbl)
5.98
10%
11%
12%
13%
70
5.51
5.18
4.86
4.57
75
6.73
6.34
5.98
5.64
80
7.90
7.46
7.06
6.67
85
9.08
8.59
8.13
7.71

Lease ($k/day) RKH Share Price (+ dilution) risked () : Discount Factor (%) vs WTI ($/bbl)
600
3.56
10%
11%
12%
13%
9.60
70
4.25
3.99
3.74
3.52
8.54
75
5.18
4.88
4.60
4.34
7.49
80
6.09
5.75
5.43
5.14
6.44
85
6.99
6.62
6.26
5.94
RKH Share Price (dilution) risked
3.56
30%
35%
70
2.89
2.62
75
3.56
3.25
80
4.20
3.84
85
4.84
4.44

() and tax "equalisation" : Tax Rate (%) vs WTI ($/bbl)

40%
45%
2.35
2.08
2.93
2.62
3.48
3.13
4.03
3.63