Why Rockhopper Jumped 9%

Rockhopper Exploration (LSE: RKH.L  ) jumped 9% to 300 pence this morning after announcing a farm-out agreement with Premier Oil (LSE: PMO.L  ) .

Rockhopper, which was established in 2004 to explore for oil around the Falkland Islands, is to sell 60% of its production licenses to Premier for an initial $231 million. Premier will also fund Rockhopper's portion of development costs up to $722 million. Premier's shares advanced 3% to 370 pence on the details.

Today's news follows Rockhopper's successful drilling campaign, which lasted between April 2010 and January 2012 and witnessed three oil discoveries and three gas discoveries. In particular, the operator's Sea Lion field was the first to produce oil in Falkland Island waters and has been classified as containing 355 million barrels of oil.

Sam Moody, chief executive of Rockhopper, said: "This is an excellent transaction for the company and its shareholders. It helps crystallise the value of our discoveries in the North Falkland Basin area centred on the Sea Lion field, as well as providing the funds to examine further the remaining potential of our acreage in the region."

This morning's update from Rockhopper underlines how oil explorers can become wonderful investments for ambitious investors; the shares traded as low as 11 pence during 2008 and have since multiplied in value 26 times.

If you are keen to earn such handsome returns from shares, this free Motley Fool report, "10 Steps To Making A Million In The Market," can help you on your way. The report explains how tracking down small, undiscovered companies -- such as Rockhopper at 11 pence in 2008 -- is a vital step on the path to the magic million.

What are the other steps? Please download the report to find out, while it's still free and available.

Investing is by no means easy in today's uncertain economy. That's why we've published "Top Sectors for 2012" -- our guide to three favorable industries. This free report will be dispatched immediately to your inbox.

Further Motley Fool investment opportunities:

Maynard Paton owns no shares of the companies mentioned. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1941661, ~/Articles/ArticleHandler.aspx, 10/22/2016 8:08:26 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 10 hours ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes