Navitas To Become Operator Of Sea Lion Project
UK oil and gas company Rockhopper Exploration has penned a definitive deal with Harbour Energy and Navitas Petroleum, opening the door for Navitas to enter the Sea Lion project located off the Falkland Islands.
Harbour exited the Sea Lion project in September 2021. Following that decision, Rockhopper, Harbour, and Navitas signed heads of terms deal in late 2021 to allow a clean departure from the project for Harbour and a farm-in for Navitas.
Rockhopper said earlier this week that the firms signed a legally binding definitive documentation concerning Harbour exiting and Navitas entering the North Falkland Basin.
Under the deal, Navitas will acquire Premier Oil Exploration and Production Limited, the company in which Harbour holds all its Falkland Islands licenses - PL003, PL004, PL005, PL0032, and PL0033.
Rockhopper and Navitas align working interests across these North Falkland Basin licenses. Namely, Navitas will get a 65 percent interest, while Rockhopper will hold the remaining 35 percent.
The two companies will also jointly develop a technical and financing plan to enable the development of the Sea Lion project to achieve first oil on a lower cost and expedited basis post-sanction.
“Subject to regulatory consents, we believe this marks the start of an exciting new chapter for the Falklands, and for the Sea Lion project in particular. Navitas’ $1 billion Shenandoah financing in 2021 proved their ability to fund challenging offshore oil and gas developments. Given this, coupled with a more positive oil price environment, we are very excited to have them as new partners and look forward to pushing ahead with Sea Lion, a world-class resource,” Samuel Moody, Rockhopper CEO, said.
Rockhopper claimed that the benefits of this transaction include ‘greater alignment and simplified commercial arrangements across the joint venture’ which will allow the UK player to ‘retain a higher working interest in the Sea Lion project than under the previous Premier-Navitas transaction’ announced in January 2020.
It is worth noting that the transaction continues to materially satisfy the company’s proportion of both pre-FID and post-FID costs for Sea Lion, while bringing in a new and committed operator for the Sea Lion project, enabling it to become Navitas’ largest operated development asset.
Rockhopper added that the transaction completion hinges upon the receipt of various agreements, consents, and approvals by the Falkland Islands Government. Utilizing the existing extensive design and engineering work undertaken for the Sea Lion project in recent years, the technical work concerning a lower-cost, alternative development will be jointly carried out by Rockhopper and Navitas.
Once completed, Navitas will become the operator of the Sea Lion project and the potential for an additional project partner will depend upon funding requirements. Rockhopper did state that it does not intend to reduce its working interest should an additional partner be required.
Sea Lion is envisioned to be developed in two phases and its satellite fields are independently estimated to hold approximately 520 mmbbl of 2C Contingent Resources. The Isobel-Elaine field is viewed as a potential Phase 3 development in the North Falkland Basin.
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