Falkland oil group plans £200m issue

Rockhopper Exploration, the oil company drilling around the Falkland Islands, yesterday announced plans to raise around £200 million through a placing of new shares.

The firm said the cash raised would help it further appraise its oil find at the Sea Lion well, drill more exploration wells and conduct further seismic tests across a wider area.

Chief executive Sam Moody said: "This funding and subsequent work programme will enable the company to significantly enhance our understanding of the size of the Sea Lion discovery and to continue the exploration of the remainder of our acreage."

In June, the group gave a "best estimate" of 242 million barrels of oil at the Sea Lion well, the first oil find around the Falklands.

Last week shares in the company fell sharply after an update led some analysts to speculate the estimate could be revised downwards.

Rockhopper said the placing, which was already under way, would be carried out by Canaccord Genuity and Merrill Lynch International and that the new shares would begin trading on 8 November.

Rockhopper shares closed up 43.75p or 15 per cent at 336.75p, nine times the level they were trading at in May.