Rockhopper suffers setback in long-running Italy arbitration
By Josh White
Date: Tuesday 03 Jun 2025
(Sharecast News) - Rockhopper Exploration suffered a setback in its long-running arbitration case against the Italian government, it announced on Tuesday after the International Centre for Settlement of Investment Disputes (ICSID) annulled a €190m damages award.
The AIM-traded firm said the decision nullified the second tranche of a monetisation agreement, meaning it would not receive the expected follow-up payment.
However, the company confirmed it would now pursue a claim under a dedicated insurance policy, which guarantees a minimum combined payout of €31m in the event of a full or partial annulment.
Rockhopper said it was also in discussions with its legal funder to assess further options.
The ICSID arbitration panel had originally ruled in 2022 that Italy breached its obligations under the Energy Charter Treaty when it imposed a ban on oil and gas exploration near its coastline, affecting Rockhopper's interests.
In response to Italy's subsequent annulment application, Rockhopper secured an insurance policy in 2024 to mitigate the risk of a negative outcome.
The policy was underwritten by A-rated carriers and placed through a specialist FCA-registered broker.
"Obviously we are disappointed with this outcome," said chief executive officer Sam Moody.
"Having already received the tranche one monetisation payment our balance sheet remains robust and we intend to claim under the insurance policy.
"With a lead lending bank appointed, we now move to finalising the funding for Sea Lion FID which has the potential to unlock very significant value as confirmed in our recently published resource evaluation."
Separately, Rockhopper published a new independent resource evaluation of its key North Falkland Basin assets.
The report by Netherland, Sewell & Associates estimated unrisked 2C gross contingent oil resources at 917 million barrels, with 321 million barrels net to Rockhopper.
Of that, 727 million barrels were classified as development pending, with 255 million barrels net to the company.
The value of Rockhopper's 35% stake in the development-pending resources, primarily within the Sea Lion project, was assessed at $1.8bn based on a Brent oil price of $70 per barrel.
Rockhopper's partner Navitas Petroleum was continuing to advance plans for a phased development of Sea Lion, including agreements for a floating production vessel and key subsea equipment.
Capital expenditure to first oil in phase one was expected to be around $1.4bn.
The Sea Lion resource estimate now included areas previously reported separately as Isobel/Elaine, simplifying the classification under a single field designation.
"We are delighted that NSAI have been able to confirm the best estimated potential value of Rockhopper's 35% working interest in Sea Lion is $1.8bn net of taxes at an oil price of $70," Sam Moody added.
"We continue to work with the operator to unlock this potential value for all stakeholders."
At 1246 BST, shares in Rockhopper Exploration were down 13.41% at 45.2p.
Reporting by Josh White for Sharecast.com.
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