18th Sep 2019 13:00
(Alliance News) - Rockhopper Exploration PLC on Wednesday said its loss more than doubled in the first half of 2019 due to a substantial goodwill impairment of more than USD10 million.
The oil and gas exploration firm posted a USD16.5 million pretax loss for the six months ended June 30, widened sharply from a USD7.4 million loss the year before.
This was primarily the result of a USD10.1 million impairment of goodwill charge.
"As a result of the acquisition of Mediterranean Oil & Gas PLC in 2014, goodwill of EUR9 million arose relating to the portfolio of intangible exploration and appraisal assets and the strategic premium associated with a significant presence in a new region. However, following the decision to dispose of Rockhopper Egypt Pty Ltd and with Italian portfolio now deemed largely non-core, a decision was made to impair the goodwill associated with that acquisition," said Rockhopper.
Revenue fell 7.7% to USD4.8 million from USD5.2 million.
Looking ahead, the company said it expects the final outcome of arbitration relating to the Ombrina Mare field in Italy during the first quarter of 2020, for which Rockhopper is "seeking significant monetary damages".
Cash resources at the end of 2019 are expected to be between GBP25 million and USD30 million. This depends upon the payment received once the company completes its Rockhopper Egypt disposal. The company also expects to make progress on detailed lender due diligence in the funding of its Sea Lion project in the Falkland Islands.
Chair Keith Lough said: "2019 has already been a busy period for the company, and the next six months have the potential to be transformational for Rockhopper with a number of very significant catalysts ahead.
"The [preliminary information memorandum] submission process marked a material milestone in the project financing process for the Sea Lion development. If, as expected, the application is well received, we anticipate moving into a phase of detailed lender due diligence and documentation during Q4 2019.
"In addition, with a supportive interim ruling on jurisdiction, we remain positive on the prospects of recovering significant monetary damages through our international arbitration against the Republic of Italy in respect of Ombrina Mare and look forward to an outcome in early 2020."
Shares in Rockhopper were up 1.5% at 19.92 pence in London on Wednesday.
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