Rocksource solves short term financial troubles

Rocksource ASA (OSE: RGT) gained 25% in today’s session as the company announced it has signed a strategic assets transactions with Valiant Petroleum Norge AS. Rocksource is seling 13% interest in the Norvarg discovery, leaving it with 7 per cent. The transaction strengthens Rocksource’s financial position as Valiant will be paying 60 million NOK in cash and will cover 200 million in exploration costs on Rocksource’s remaining license interests.

Rocksource said that the implied value of this transaction represents a premium on the company’s current market value. Short and medium term financing needs are covered and a new drilling campaign is expected to start in early 2013. Rocksource is still down heavily in the past year on the heels of several duds from its 2011 campaign.

Valiant Petroleum (LON:VPP) announced it is happy to take stakes in substantially all of Rocksource’s licenses on the Norwegian Continental Shelf for a toal pst-tax effect consideration of 104 million NOK as the carry up on the 200 million NOK will be reclaimed at 78% in the year following the expenditure. The transaction is subject to government approvals and certain other conditions.