Rockhopper Announces Resolution of Capital Gains Tax Liability

Source: www.gulfoilandgas.com 12/18/2013, Location: South America

Rockhopper Exploration plc, the North Falkland Basin oil and gas exploration company, has reached an agreement in principle with the Falkland Islands Government ("FIG") regarding the timing and quantum of the Capital Gains Tax ("CGT") liability due as a result of its farm out to Premier Oil of a 60 percent equity interest in its Sea Lion discovery.

Following extensive discussions, the parties have now agreed in principle that the total CGT payable is $146m with payment split into two tranches. The first payment, due immediately, equates to $42m, of which Rockhopper paid $39m in June 2013. The second payment equates to $104m and will now be paid at the same time as the first royalty payment to FIG from oil production at Sea Lion. The liability is to be settled in GB£ at the exchange rate prevailing at farm out completion of $1.6134/£. Further detail will be covered in the interim results which are anticipated to be released shortly.

Documentation of the above agreement will now commence, with a view to becoming effective by the end of January 2014.

Sam Moody, CEO of Rockhopper, commented:

'I am pleased that we have now reached agreement with FIG and that the uncertainty over the quantum of CGT Liability is now resolved. This is an important commercial milestone for Rockhopper as we drive the Sea Lion development forward with our partner.'


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Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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