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Home | December 2013 Please tell us what you think of this article. Tell a friend Print Friendly

Falklands : Rockhopper Exploration plc Agrees Resolution of Capital Gains Tax Liability
Submitted by Falkland Islands News Network (Juanita Brock) 22.12.2013 (Article Archived on 19.01.2014)

Rockhopper Exploration plc has announced 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 per cent equity interest in its Sea Lion discovery.

Rockhopper Exploration plc Agrees Resolution of Capital Gains Tax Liability

By J. Brock (FINN)

Rockhopper Exploration plc has announced 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 per cent 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.'

 

This article is the Property and Copyright of Falkland Islands News Network.

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