Rockhopper Exploration plc has received the full €31 million insurance arranged to protect the company against an unsuccessful outcome in the Ombrina Mare oil field arbitration.
CLARITY
In June, the company lost the second tranche payment in its dispute with the Italian Government, during proceedings at the International Centre for Settlement of Investment Disputes (ICSID).
The arbitration relates to Italy’s 2015 ban on oil and gas exploration within 12 miles of the Italian coastline, which affected Rockhopper’s activities on Ombrina Mare located off the Abruzzo coast.
Rockhopper, whose main assets are in the North Falkand Basin, plans to submit a new request for arbitration, with a new funder meeting the costs of contesting the request.
In a success case, and after costs and expenses, Rockhopper will use the money to reimburse the insurers regarding the insurance proceeds.
An amendment has also been made to its agreement to sell its Italian subsidiary Rockhopper Civita Ltd, which holds Rockhopper’s Italian assets and liabilities, except for the Ombrina Mare arbitration, to Zodiac Energy Ltd.
The new terms include that Zodiac will pay £1 and assume any outstanding liabilities from Rockhopper to Rockhopper Civita Ltd, up to €4.5 million.
Rockhopper will retain a royalty on two assets: the northern Adriatic licence AC19 with two gas discoveries and an additional adjacent prospect, and Serra San Bernado, which contains the Monte Grosso prospect.
The deal, subject to Italy’s and the Falkland Islands Government’s approval, has a longstop date of 31 March 2026.
“The steps announced today provide us with further strategic and commercial clarity as we continue to focus on progressing the Sea Lion development,” said chief executive officer Samuel Moody.
“The combination of the insurance and transaction with Zodiac allows us to refocus the company on Sea Lion by further reducing both short and long-term costs, reducing risk, and protecting our balance sheet whilst maintaining some potential upside in two Italian licences.”