Oil firm Rockhopper raises £48.5m for Falklands drilling

Oil firm Rockhopper Exploration has raised almost £50m by selling shares to fund its drilling programme off the Falkland Islands. The placing comes a few days after it announced that its first well in the North Falkland Basin, called Sea Lion, had found much more oil than expected. It plans to use the funds to develop Sea Lion and dig a second exploration well at a site known as Ernest. Rockhopper is one of four companies to have hired a drilling rig to drill about eight mostly deepwater wells around the islands, which have never produced oil. Last month, the Aim-listed company announced that it had struck oil, sending its shares soaring by 150%. Many islanders have bought shares in the company, which is named after a native penguin. Rockhopper's shares rose again on Friday after it reported Sea Lion had discovered 242m barrels of recoverable reserves, more than the original estimate of 170m barrels, and at a higher quality. Last night, its market value stood at £422m, compared to £18m a year ago. The chairman said yesterday the company was considering moving on to the main FTSE market to raise its profile and make it easier to raise cash for future activities. Wildlife organisation Falklands Conservation said it hoped that BP's Gulf of Mexico disaster would make companies like Rockhopper even more safety conscious. "Perhaps it will improve their operations," chief executive Craig Dockrill said. The Falklands are home to 80% of the world's black-browed albatrosses, 30% of its south rockhopper penguins and 20% of its gentoo penguins. However, the Argentinian government remains opposed to the drilling. Twenty-eight years after the Falklands War, it still hopes that Britain's hold on the islands can be loosened. Yesterday the Organization of American States (OAS), which brings together the nations of south and north America, was to debate "the colonial situation of the Malvinas, South Georgia and South Sandwich Islands and adjoining maritime spaces". Geologists estimate that up to 60bn barrels of oil and gas equivalent could lie in the Atlantic waters around the islands, which would put the region on a par with the North Sea. But reaching the oil and transporting it thousands of miles by tanker is much more challenging. The waters around the Falklands reach depths of more than 3,000m, much deeper than the Gulf of Mexico waters where the BP rig Deepwater Horizon sank.