Rockhopper To Go Ahead With Sea Lion Project Despite Harbour Exit
Harbour Energy, a company created through the merger of Chrysaor and Premier Oil, has made a decision to exit the Sea Lion oil field development in the Falkland Islands.
The Sea Lion project, with independently audited 2C resources of over 500 million barrels, was discovered in 2010 by Rockhopper, but the project development start-up has been delayed several times. In 2014, Premier Oil – now integrated into Harbour – and Rockhopper targeted first oil for 2019. But the field development has yet to reach a final investment decision, several years later.
Harbour Energy has a 60 percent stake in the oil field while Rockhopper holds the remaining 40 percent stake.
Rockhopper said in a statement that it has held the Sea Lion acreage since 2004 and will continue to pursue the development of Sea Lion regardless of Harbour Energy’s exit.
The company added that it is in discussions with Navitas Petroleum around its potential entry to the Sea Lion project following Harbour's decision not to proceed. Rockhopper notes that Navitas and partners have recently raised project financing in excess of $900 million and taken the final investment decision on the 330-million-barrel deepwater Shenandoah project in the US Gulf of Mexico.
The previously announced heads of terms with Premier Oil and Navitas will expire on 30 September 2021 unless extended by mutual consent before that date. If the heads of terms expire, Harbour will have an initial 90 days to elect how to proceed with their exit.
Rockhopper will continue to be funded – excluding license fees, taxes, and project wind-down costs - by Harbour during that period under previously announced terms.
The company will now work with Harbour and the Falkland Islands Government to ensure an orderly exit by Harbour from the Falkland Islands.
“This represents both a difficult moment for Rockhopper and a huge opportunity. Whilst we are disappointed that Harbour has decided not to proceed with Sea Lion, we remain committed to unlocking its development,” Sam Moody, CEO of Rockhopper, said.
“Navitas’ recent financing on its Shenandoah project demonstrates that funding remains available to independent E&Ps in the international markets for large-scale offshore oil developments and we very much look forward to working with them to progress Sea Lion,” he added.
In a separate statement, Harbour Energy said that it would also be exiting its exploration license interests in the Ceará Basin in Brazil and the Burgos Basin in Mexico.
"While the Sea Lion discovery has significant resource potential, development of the project is not deemed a strategic fit for Harbour. Therefore, the group has decided to explore the options to exit the project and its other license interests in the Falkland Islands," Harbour stated.
"This is in line with the group's exploration strategy which is focused primarily on infrastructure-led, lower risk opportunities in areas with an existing Harbour producing presence," the company added.
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