Rockhopper faces investor demands to return cash from oil deal

LONDON (Reuters) - Rockhopper , a British company which has made a significant oil find in waters near the disputed Falkland islands, is facing demands from a key shareholder to return capital, according to a source familiar with the situation.

Odey Asset Management, a hedge fund which owns over 10 percent of Rockhopper, was meeting the company on Thursday, having called on it to return some of the $231 million (152 million pounds) cash it received from a deal it struck last year, said the source, who wished not to be identified.

Rockhopper last year signed a $1 billion deal with larger firm Premier Oil to develop its oil discovery, whereby Premier will provide around $770 million to help build infrastructure to get oil pumping in return for a 60 percent stake in the asset.

Rockhopper said in December its free cash pile had reached around $270 million as a result of the deal. It declined to comment on the meeting with Odey.

Shares in Rockhopper have crashed 42 percent since the deal with Premier, hammered by investor disappointment over the absence of a full takeover of the company and also questions about the value of the deal with Premier.

The stock closed up 6 percent on Thursday. Several analysts attributed the rise to the market's increasing expectation of a cash return, after a number of press reports about the Odey meeting.

Another analyst said Premier's statement earlier on Thursday, which confirmed that first oil from the Falklands was on track for 2017, also boosted Rockhopper's shares.