As energy markets shift focus toward long-term security and strategic resource control, frontier oil and gas plays are regaining attention, particularly in geopolitically stable, underexplored basins.
The Falkland Islands, long regarded as a high-potential region with significant untapped reserves, are once again in the spotlight. Two AIM-listed companies, Rockhopper Exploration plc and Borders & Southern Petroleum plc, are leading the charge. Both firms hold material offshore assets and have made meaningful progress toward monetising large-scale discoveries. Their respective flagship projects, Sea Lion and Darwin, could reshape the future of Falklands-based hydrocarbon production. With share prices rebounding and investor interest accelerating, these stocks are demanding a closer look in 2025.
Rockhopper Plc
Rockhopper Exploration plc (RKH) is an AIM-listed oil and gas company focused on unlocking the vast potential of the North Falkland Basin. With a 312.66% share price increase over the past year, the company has re-emerged as a significant player in the energy sector, driven by renewed momentum on its flagship Sea Lion project. The project is one of the largest undeveloped offshore oil fields globally, boasting independently audited 2C resources of approximately 517 million barrels of oil. Following recent positive updates from Navitas Petroleum, the project’s operator, Sea Lion is again drawing attention from institutional investors and energy analysts.
In 2025, Rockhopper made several strategic announcements that solidify its positioning. These include a six-month extension of its Falkland Islands licences, granting the company additional time to capitalise on operator-led progress. The recently reported RNS update from Navitas Petroleum detailed key milestones for project financing and development planning, including a phased strategy aimed at de-risking early production. Additionally, Rockhopper has streamlined its portfolio by exiting two Italian assets, focusing management efforts squarely on the transformative potential of the Falklands.
From a financial and legal standpoint, Rockhopper has further enhanced its risk profile. The company recently reached a full and final settlement with United Oil & Gas, resolving longstanding disputes. Additionally, Rockhopper is pursuing international arbitration against the Italian government over the revoked Ombrina Mare licence, seeking compensation through the International Centre for Settlement of Investment Disputes (ICSID). This dual-track strategy, maximising Falklands value while attempting to recoup sunk Italian investments, demonstrates disciplined capital stewardship and legal resolve. The company’s management team remains stable and experienced, with CEO Sam Moody continuing to lead strategic initiatives.
Looking ahead, Rockhopper’s valuation hinges on the successful advancement of the Sea Lion project. Backed by Navitas Petroleum and buoyed by institutional ownership nearing 50%, market confidence is clearly building. However, risks remain, particularly surrounding project financing, Falkland Islands geopolitics, and global oil price volatility. Yet for investors seeking exposure to a high-upside frontier energy play with clearly defined assets, advancing operator partnerships, and improved financial discipline, Rockhopper represents a revitalised opportunity that’s once again back on the radar.
Borders & Southern Petroleum Plc
Borders & Southern Petroleum plc (BOR) is an AIM-listed oil and gas exploration company with a strategic focus on the Falkland Islands. Holding three production licences and a discovery area licence spanning nearly 10,000 km², the company maintains 100% ownership and operatorship of its assets. The flagship Darwin gas condensate discovery represents a significant liquids-rich resource, with independent estimates indicating 3.2 trillion cubic feet (TCF) of wet gas initially in place and 462 million barrels of condensate and LPG on an un-risked best estimate basis. Borders & Southern’s approach has always favoured high-impact frontier basins, and Darwin is considered one of the highest quality undeveloped discoveries in the region.
The company made notable strides in 2024, as outlined in its annual report, by implementing three key initiatives: refining its early production concept, securing the services of an international investment bank to lead a farm-out process, and completing two equity fundraisings to strengthen its financial footing. These fundraises, including a £1.5 million institutional placing and a subsequent retail offer, brought in approximately £3.7 million in total. These moves have placed the company in a stronger negotiating position for its upcoming farm-out, which is central to securing the funding required for Darwin’s appraisal phase.
Technical evaluations continue to reinforce Darwin’s commercial attractiveness. Reservoir data shows a high-quality sandstone formation with porosities up to 30% and excellent permeability, supporting a phased development strategy using a conventional FPSO. The project could yield up to 70,000 barrels per day over time, with initial payback potentially achievable within two years at $60 oil. Additionally, the environmental profile is favourable, as Darwin’s condensate has an API gravity of 46–49 degrees and no routine gas flaring is planned, reinforcing the project’s alignment with ESG expectations. Notably, Borders & Southern continues to actively engage with the Falkland Islands Government to maintain good-standing of its licences, which now run through to the end of 2026.
Looking forward, Borders & Southern presents a classic high-risk, high-reward frontier opportunity. The company remains debt-free and holds over $2 million in cash, providing runway until at least mid-2026, as highlighted in its final results. While the Darwin project is technically robust and de-risked from an exploration perspective, significant uncertainties remain around financing and partner selection. Still, investor sentiment has improved, as reflected in recent share price momentum. For investors comfortable with frontier asset exposure, Borders & Southern may offer asymmetric upside as it seeks to monetise a world-class gas condensate discovery through strategic partnerships and disciplined capital stewardship.
Conclusion
Rockhopper and Borders & Southern each offer investors uniquely structured exposure to the Falklands’ energy frontier. Rockhopper is riding a wave of renewed confidence, catalysed by the progress of its operator, Navitas Petroleum, and strategic license extensions. Meanwhile, Borders & Southern is positioning Darwin as a near-ready asset, backed by strong technical fundamentals and bolstered financials. Both companies remain pre-revenue and subject to capital market risk, but their respective operational strategies, fiscal discipline, and clear government engagement efforts distinguish them in a volatile small-cap energy space. For those able to stomach the uncertainty, the upside potential linked to first oil from the Falklands is substantial.
What’s Next?
Norwegian engineering specialist Aragon has been awarded a front-end engineering and design (FEED) contract by Bluewater Energy Services to redeploy the Aoka Mizu FPSO, which is currently operating in the UK North Sea.
The vessel, which is currently producing on the Lancaster oilfield, is being prepared for transfer to the Sea Lion oil project in the Falkland Islands. Israeli operator Navitas Petroleum is leading the project, which sees the Aoka Mizu as a key component in unlocking the region’s offshore potential.
This development marks a significant milestone toward the advancement of Sea Lion, one of the most promising undeveloped oil fields in the South Atlantic.
Bluewater’s Aoka Mizu FPSOPhoto: BLUEWATER
Sea Lion Project to Deliver Over 120,000 BPD in Phased Development
The Sea Lion project—the Falkland Islands’ first offshore oil development—is being executed in three phases. Phases one and two will leverage the redeployed Aoka Mizu FPSO, with peak production expected to reach 55,000 barrels of oil per day (BPD). Once all phases are complete, total production capacity is projected to exceed 120,000 BPD, underscoring the project’s scalable design and alignment with long-term energy efficiency and resource optimisation trends.
The coming 12 to 18 months will be pivotal for both companies. Rockhopper’s valuation trajectory will depend on the next Sea Lion milestones from Navitas, especially any formal development sanction or financing package.
Borders & Southern’s focus is more singular: securing a well-aligned farm-out partner for Darwin.
Investors should watch for updates from both companies around appraisal scheduling, capital structure shifts, and regulatory interactions with the Falkland Islands Government. A shift from potential to production remains the ultimate catalyst. If either company successfully crosses that threshold, the Falklands basin could quickly evolve from speculative frontier to active energy hub.
Disclaimer: The information presented in this article represents the opinions and research of the author and is provided for informational purposes only. It is not intended to be, nor should it be interpreted as, financial, investment, or legal advice. Investors are encouraged to perform their own due diligence and consult with qualified financial advisors before making any investment decisions. Investing in small-cap stocks involves significant risks, and past performance is not indicative of future results. The author and publisher are not liable for any financial losses or actions taken based on the content of this article.
