Rockhopper Exploration plc has secured an insurance policy in case the Italian government succeeds in annulling the company’s Ombrina Mare arbitration award.
CLARITY
The company has also signed a share purchase agreement with Zodiac Energy Ltd for its other Italian assets to focus on the South Falkland Basin.
Rockhopper said that the insurance policy would ensure that the tranche 2 payment and the insurance payout combined would entitle Rockhopper to a total no less than €31 million.
The policy costs a total €4m, leaving the company with $24m.
The SPA covers the sale of Rockhopper’s subsidiary, Rockhopper Civita Ltd which holds all Rockhopper’s Italian assets and liabilities except the Ombrina Mare arbitration award.
The sale, in two instalments of €3m and €2.5m, is dependent on approvals, conditions and the outcome of Italy’s attempt to annul the arbitration award.
Rockhopper will retain a royalty on the AC19 northern Adriatic licence with two gas discoveries and an additional adjacent prospect and Serra San Bernado, containing the Monte Grosso exploration prospect.
In the year ended 31 December 2023, Rockhopper Civita contributed a $1.6m loss to the group.
“The steps announced today provide us with further strategic and commercial clarity as we continue to focus on progressing the Sea Lion development,” added chief executive Samuel Moody.
“The combination of the insurance policy and transaction with Zodiac allows us to refocus the company on Sea Lion by further reducing both short and long term costs, reducing risk, protecting our balance sheet whilst maintaining some potential upside in two Italian licences.”