Rockhopper: Falklands oil find bigger than expected

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Rockhopper exploration has increased its estimate for how much oil it could find and extract off the Falkland Islands.

The announcement increases hopes that the remote South Atlantic archipelago could become a new centre for oil production.

Rockhopper said new seismic data indicated its Sea Lion discovery in the North Falkland basin could extend further than expected.

The company raised its low-case estimate of oil in place to 608 million barrels, from 516 million. "We are highly encouraged by the interpretation of new seismic data which identifies both significant reservoir extension and the existence of two additional fan prospects above and beneath the Sea Lion Main Complex," said Rockhopper's chief executive, Sam Moody.

Rockhopper shares rose 8.9 per cent to 237p. They jumped 48 per cent a week ago when Rockhopper said it expected Sea Lion to be commercially viable.

Shares of Desire Petroleum jumped 13 per cent to 19.25p after Rockhopper issued its statement. Desire owns 92.5 per cent of a neighbouring site into which Sea Lion could stretch.

Desire said it welcomed Rockhopper's announcement but that, as it did not have enough data yet, it could not confirm Rockhopper's analysis.

Rockhopper and Desire are among a number of explorers drilling in waters off the Falklands, which are governed by Britain but claimed by Argentina.

Using Rockhopper's mid-case estimate of resources at the Sea Lion discovery, and based on a recovery factor of 30 per cent, 325 million barrels of oil could be produced, it said.