UK RockRose Cuts Spend but Output Hedged
UK independent RockRose remains "well positioned, despite current oil market uncertainties" to cope with the present market situation, it said March 26. Its oil and gas output hedged, it has no debt and it has £287 ($340)mn cash. It has not been allowed to publish results for 2019 following an order from the Financial Conduct Authority but its trading update said it would pay a dividend and cut its expenditure.
RockRose was listed four years ago when Brent crude traded below $30/barrel and it says it has remained focused on being able to operate in a low oil price environment. It expects unit operating costs of around $30/b oil equivalent this year.
RockRose hedged 455,000 barrels of oil at $65.70/b for Q1 2020 and 63mn therms of gas at 49p/therm for calendar 2020, both at prices well above the forward curve: the next three quarters of this year are assessed at about 25 p/therm. Looking further ahead, an additional 54mn therms have been hedged in each of 2021 and 2022 at 38p and 42p respectively.
Its capital expenditure for this year was to have been about $200mn, with much of that earmarked for the development of the Shell-operated Arran gas/condensate field. However, other discretionary spending is being reviewed and it is anticipated that at least $50mn of this capital expenditure will be deferred, a drop of 25% and in line with other businesses, it said.
RockRose is still expecting to make a final dividend of 25p per share, bringing the total for 2019 to 85p. The Brae field, which it operates, has no staff with symptoms of Covid-19 and no staff in isolation.