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LONDON - Rockhopper Exploration plc (AIM:RKH), an oil and gas company with significant interests in the North Falkland Basin, has announced that the Republic of Italy has successfully annulled an arbitration award previously granted to the company. The annulment means that Rockhopper will not receive the second tranche of payment initially expected under a Monetisation Agreement dated December 20, 2023.
The arbitration, under the International Centre for Settlement of Investment Disputes (ICSID), related to a dispute where Rockhopper claimed that Italy had breached its obligations under the Energy Charter Treaty. Initially, Rockhopper was entitled to compensation of €190 million plus interest, according to the unanimous decision of the arbitration panel on August 24, 2022.
However, Italy sought to annul the award, which has now been successfully executed, leading to the Tranche 2 payment being reduced to zero. In anticipation of such an outcome, Rockhopper had taken out an insurance policy, announced on October 14, 2024, to protect against the loss resulting from annulment of the award. The policy guarantees that Rockhopper will receive a minimum of €31 million through a combination of the Tranche 2 payment and the insurance payout.
The company is currently in discussions about possible next steps with the specialist funder of the Monetisation Agreement. Despite the setback, Rockhopper’s CEO, Sam Moody, expressed that the company’s balance sheet remains robust following the Tranche 1 payment and that they intend to claim under the insurance policy.
Rockhopper is moving forward with securing funding for the Sea Lion Field Development (FID), which the company believes has the potential to unlock significant value, as supported by a recent resource evaluation. This news is based on a press release statement from Rockhopper Exploration plc.
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