UPDATE 1-Rockhopper casts doubt on Falklands reserves

* Says current limited data would impact report findings

* Says report today would reduce reserves

* Says further exploration, funding needed

* In talks with rig owners to drill more wells

(Adds details, background, shares, analyst comment)

LONDON, Oct 13 (Reuters) - British explorer Rockhopper RKH.L cast doubt on oil reserve estimates it has made for its closely watched discovery in the Falklands islands, hitting its shares hard at the open.

The company, which has discovered commercially viable oil at the Sea Lion well, warned on Wednesday that it lacked sufficient data for a planned technical report to support its preliminary resources estimate.

But it added that it was “very confident” about the commerciality of the discovery and “comfortable” with the existing resources estimate.

In June, Rockhopper gave a best estimate of 242 million barrels of oil at the well, the first oil find in the British governed Falklands.

Analyst Richard Rose at Oriel Securities said it was likely that this would be revised closer to 170 million.

The broker said: “Until further appraisal wells are drilled in the field, it is very difficult to extrapolate accurate resource estimates and the range of potential outcomes will remain in a very wide range.”

“The shares will inevitably get hit today but our view is that Sea Lion is a commercial discovery and any significant pullback would represent a buying opportunity.”

Rockhopper shares plunged 18 percent to 375 pence at the open, still a long way above the 50 pence price they were trading at before the discovery was announced in May.

Rockhopper also said it was planning to extend its drilling campaign in the North Falklands basin, but was likely to need more funds to do so.

It said it had identified “attractive” new targets and was in talks with the owners of the Ocean Guardian rig for a new three well contract and five options extension.

Such a contract would require the deposit of “significant funds”, the company said.

“Whilst the Sea Lion discovery has enhanced prospects for the company and its shareholders, further significant exploration activity will need to be undertaken given the frontier nature of the basin, to prove up the full potential of that basin,” Rockhopper said.

“The company is therefore currently evaluating its funding options, which may include an equity issue.”

The drilling has sparked protests from Argentina, which claims sovereignty over the islands it calls the Malvinas that lay 300 miles from its shore.