Oil firm Rockhopper stops Malta study

Oil exploration firm Rockhopper has confirmed it will not extend its exploration study agreement for oil exploration in Malta, a decision first mooted two years back.

The oil company said it had given notice to the Maltese regulator that it will not extend the Area 3 Exploration Study Agreement, which expired in December 2016, citing its “highly selective approach to new exploration ventures” as reason.

In December 2014, Rockhopper had already informed the Maltese government it will be withdrawing from the Area 4 licence it took over from Mediterranean Oil and Gas earlier that same year. The decision followed results from the Hagar Qim well drilled in mid-2014.

But elsewhere in Area 3, Rockhopper was processing a 2D-broadband survey, which interpretation informed the decision whether to extend or not the ESA.

Falklands firm Rockhopper completed the acquisition of Mediterranean Oil & Gas plc in 2014, acquiring a portfolio of production and exploration interests in Italy, Malta and France.

Only a year earlier, MOG boss Bill Higgs spoke of exciting geological data from an €8.3 million exercise that indicated a prospective oil deposit for anything up to 200 million barrels.

But Malta’s most anticipated oil prospects in 20 years fizzled out as quickly as they had started: weeks before plugging the Hagar Qim well in June, MOG sold its shares to Rockhopper for €37 million, at a premium of 31.1% over its average share price.

Rockhopper acquired a low-cost entry into the Mediterranean, apart from its gas facilities holdings both onshore and offshore Italy.

The Hagar Qim well proved a dry hole by the time MOG spudded a well and sold off to Rockhopper, which stated that the acquisition would give it “access to better exploration assets such as the Monte Grosso exploration prospect in the southern Apennines region of Italy” and new prospects in offshore Montenegro.

Malta played down the ‘no value’ that Rockhopper gave to the Hagar Qim well when buying MOG. “It was not related to the petroleum prospects of the area. The fact Rockhopper is interested in exploration offshore Malta is a good sign which should be encouraged,” a spokesperson for transport minister Joe Mizzi had said at the time.

Area 3 covers some 6,000 square kilometres, now in the hands of Melita Exploration, a wholly-owned subsidiary of Rockhopper. The operator for the area is Cairn Energy, which had to take a decision one way or the other on the concession before the end of 2018.