Rockhopper oil deal

ROCKHOPPER Exploration yesterday cheered investors by announcing a deal with fellow Falkland Islands oil explorer Desire Petroleum and that it had attracted “initial interest” from potential partners and lenders over developing its interest in the region.

Desire will receive 40 per cent of any proceeds from Tranche D Desire will receive 40 per cent of any proceeds from Tranche D

The company’s shares jumped 20¾p to 212p, despite raising £46.5million at 180p a share to fund further drilling following the Desire deal.

Rockhopper believes its Sea Lion discovery extends into an area called Tranche D, owned by Desire. Rockhopper has taken its stake in Tranche D up to 60 per cent in return for a promise to drill the area in the hope a further 140million barrels of oil can be added to the 1.4billion estimated to be in Sea Lion.

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Desire will receive 40 per cent of any proceeds from Tranche D. Its shares rose 3¾p to 21p. Rockhopper said it expected the development of Sea Lion, which will cost about $2billion (£1.3billion), to be funded by a combination of partners financing and debt.

However, experts warned the potential pool of investors might be small because of the continuing row over the islands between the UK and Argentina.

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