Rockhopper – the next Cairn Energy?
Monday, 17 March 2008
Oil prices are likely to continue to rise beyond current analyst forecasts, according to Bradley Mitchell, manager of the Royal London UK Growth Trust and within the sector, exploration stocks look set to outperform the broader market. Early investors in Cairn Energy have been rewarded generously for their conviction over recent years and Mitchell believes he has identified this potential in Rockhopper.
Rockhopper is a UK-based, AIM listed company that has acquired significant drilling licences in the Falkland Islands. With oil prices at over US$100 per barrel, earlier concerns over the economic viability of exploration in the region no longer apply. Recent positive seismic data and 3D modelling supplied by leading seismic technology company, Offshore Hydrocarbon Mapping, point to potentially significant oil reserves in the area and the company's share price has climbed sharply as a result.
Bradley Mitchell said, "Investor faith in ever higher oil prices has been well-rewarded as the scale of the lack of supply response against a backdrop of ever rising global demand becomes increasingly apparent. Under this scenario, I believe the real high performers will be the successful oil exploration companies.
"I have been a long-term investor in Rockhopper and of course, oil exploration demands patience and involves high risks on occasions. However the company has inherited broad drilling opportunities in the Falklands and looks set to benefit from other exploratory activity in the region. If just one of Rockhopper's indicated oil fields comes through, its shares should be worth many multiples of their current value."
Bradley Mitchell has been managing the Royal London UK Growth Trust since January 2006. Over the 12 months to 29/02/08 the fund has delivered a total return of 0.65% against a sector average of -5.60% (bid to bid, net of fees, source: Financial Express).
- ENDS -
For further information:
RLAM
Stephen Watchorn
Tel: 020 7506 6582
Stephen.watchorn@rlam.co.uk
Quill Communications
Jo Stonier
Tel: 020 7758 2230
Jo.s@quillcommunicate.com
Editor's notes:
Royal London Asset Management (RLAM) was established in 1988 and specialises in providing investment management solutions for both the Royal London Group and a range of external institutions. These include FTSE 250 companies, local authorities, universities, charities, wealth managers, financial advisers and private clients. RLAM manages over £31bn of assets, employing more than 50 experienced investment professionals in our London based office.
Royal London Group is a specialist financial service provider. Its businesses focus on those sectors of the market which value premium propositions, operating through a number of brands:
- Scottish Life – UK pensions market
- Bright Grey – UK protection market
- Scottish Life International – offshore investment markets
- RLAM – fund management
- RLAS – life and pensions administration
- Fundsdirect / Ascentric – funds supermarket; Wrap Platform
Royal London is the largest mutual life and pensions company in the UK with Group funds under management of £33.1 billion. Group businesses serve around three million customers and employ 2,620 people. (Figures quoted are as at 31 December 2007).