Rockhopper soars on Falkland Island oil discovery

North Falklands basin oil explorer Rockhopper Exploration (RKH) is currently up 143% to 91p on news that oil has been discovered at the Sea lion prospect. Great news for the Contrarian Investor portfolio given the average purchase price of 42p.  I have taken profits on a large slug of the holding and await further news from the testing programme. It was a case of "nerves of steel" yesterday as Rockhopper's price dropped to around 36p on the general market fall and presumably market makers filling their boots at these low levels in anticipation of an announcement. News clearly leaked this morning before the official RNS as the price had already climbed over 10% by mid morning.

The RNS released at noon today said "Rockhopper Exploration, the North Falkland Basin oil and gas exploration company, is pleased to announce that well 14/10-2on the Sea Lion prospect has reached a depth of 2,744 metres. Initial data collected indicate that this well is an oil discovery, which would be the first in the North Falkland Basin. The Company has run a suite of wireline logs and logging data collected thus far indicate that the well has encountered a 150 metre gross interval of sand and shales. The data show that the well has 53 metres of net pay distributed in multiple pay zones, the thickest of which has a net pay of 25 metres. These pay zones have an average porosity of 19%. Rockhopper now intends to collect additional logging information prior to making a decision whether to plug and abandon the well, or to suspend the well for future testing. The Company is also considering whether to drill an appraisal well on Sea Lion later during the current drilling campaign. Further information will be distributed in due course. It remains the intention of the Company to drill the Ernest prospect in the fourth slot of the overall Falklands Drilling programme.Samuel Moody, Managing Director, commented: "We are extremely excited by the results of this well. While we are presently acquiring additional data, current indications are that we have made the first oil discovery in the North Falkland Basin. We will now focus on analysing inmore detail the data gathered from the well, in addition to continuing preparations for thedrilling of our Ernest prospectlater in the year."

Market stabilises after sell-off

After further falls this morning, the FTSE 100 is currently up 24 points at 5,361 after being down as much as 80 points and DOW futures are up 22 at 10,893. Unfortunately long positions in the FTSE and DOW were stopped out with the falls this morning and yesterday, illustrating the volatility of these markets and the difficulty in playing these short term movements.

Coal of Africa (CZA) has finally moved into positive territory after falling from around 150p to below 120p in less than a week on the general commodity sell off.  My expectation was that CZA would not fall below 120p given the imminent main market listing.  The shares are currently flat at 124p.

It has been reassuring that GW pharma (GWP) has not moved down despite the large market sell off and it is currently up 1.5p to 120p. I am waiting with baited breath for news of Sativex national approval in the UK and Spain.