Why Rockhopper Jumped 9%

Rockhopper Exploration (ISE: RKH.L) jumped 9% to 300 pence this morning after announcing a farm-out agreement with Premier Oil (ISE: PMO.L) .

Rockhopper, which was established in 2004 to explore for oil around the Falkland Islands, is to sell 60% of its production licenses to Premier for an initial $231 million. Premier will also fund Rockhopper's portion of development costs up to $722 million. Premier's shares advanced 3% to 370 pence on the details.

Today's news follows Rockhopper's successful drilling campaign, which lasted between April 2010 and January 2012 and witnessed three oil discoveries and three gas discoveries. In particular, the operator's Sea Lion field was the first to produce oil in Falkland Island waters and has been classified as containing 355 million barrels of oil.

Sam Moody, chief executive of Rockhopper, said: "This is an excellent transaction for the company and its shareholders. It helps crystallise the value of our discoveries in the North Falkland Basin area centred on the Sea Lion field, as well as providing the funds to examine further the remaining potential of our acreage in the region."

This morning's update from Rockhopper underlines how oil explorers can become wonderful investments for ambitious investors; the shares traded as low as 11 pence during 2008 and have since multiplied in value 26 times.

If you are keen to earn such handsome returns from shares, this free Motley Fool report, "10 Steps To Making A Million In The Market," can help you on your way. The report explains how tracking down small, undiscovered companies -- such as Rockhopper at 11 pence in 2008 -- is a vital step on the path to the magic million.

What are the other steps? Please download the report to find out, while it's still free and available.

Investing is by no means easy in today's uncertain economy. That's why we've published "Top Sectors for 2012" -- our guide to three favorable industries. This free report will be dispatched immediately to your inbox.

Further Motley Fool investment opportunities:

At the time thisarticle was published Maynard Paton owns no shares of the companies mentioned. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.