Page 13 - LatAmOil Week 01 2020

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NEWS IN BRIEF
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These include: working interests aligned across the Sea Lion licences PL032, PL004b and PL004c: Premier 40% (Operator); Rockhopper 30%; Navitas 30%; adds additional strength to the Sea Lion joint venture, which Rockhopper believes will increase the likelihood of a success- ful senior debt project financing for the Sea Lion Phase 1 development; Rockhopper’s costs for the Phase 1 development (not met by senior debt) to be met by a combination of carry and loans from Premier and Navitas from 1 January 2020 to Phase 1 Project Completion (estimated to occur 9-12 months after first oil); Greater alignment and simplified commercial arrangements across the joint venture; Rockhopper maintains mate- rial share of Phase 1 project NPV, a significant 30% interest in Phase 2 Sea Lion development, and additional upside from the Isobel-Elaine area (PL004a); Contingent consideration pay- able to Rockhopper by Premier and Navitas of up to US$48mn related to future phases of development in the North Falkland Basin; and Finalisation of a Sale and Purchase Agreement is expected during Q1 2020 with completion sub- ject to satisfaction of certain conditions includ- ing regulatory approval, expected in Q2 2020
Samuel Moody, CEO of Rockhopper, com- mented: “This is a very important milestone both for the Sea Lion project as a whole and Rockhopper itself. We will be delighted to wel- come Navitas to the Sea Lion project and regard their joining as an important catalyst as well as industry endorsement of Sea Lion’s scale (inde- pendently audited 2C resources of [about] 520 mmbbls) and potential (NPV10 at first oil [around] $4bn). Navitas add valuable offshore experience from their Gulf of Mexico projects and hugely successful prior personal involve- ment in Israel’s offshore sector. They also mate- rially strengthen and enhance the prospects for a successful project financing, as clearly demon- strated by their success in funding other similar developments elsewhere in the world and with proven access to capital markets.
“Furthermore, we are obviously very pleased to announce that all of our project costs are being covered from the start of 2020 and in the event of a successful sanction that they will continue to be covered through to Phase 1 Project Com- pletion (estimated 9 - 12 months after first oil) while maintaining a very material 30% stake in the Sea Lion project along with additional upside in the PL004a licence containing the Isobel dis- covery. This transaction will therefore materially strengthen the company financially.
“Discussions are continuing to progress with senior lenders regarding project financing and should be positively supported by the Transac- tion. We will update the market on the progress of those discussions in due course.
“Our arrangements with Navitas are at a detailed non-binding Heads of Terms stage and
we look forward to working with them to put in place formal binding documentation in the coming months. In the intervening period, we are pleased that Premier has separately agreed funding arrangements for all of Rockhopper’s costs on Sea Lion.”
Rockhopper Exploration, January 07 2020
Echo Energy issues drilling
and operational update
for Argentina
Echo Energy, the Latin American-focused upstream oil and gas company, has announced both the perforation and initiation of stimula- tion operations at Tapi Aike and drilling at the Campo Limite exploration well.
Following the completion of drilling opera- tions at the company’s Campo La Mata x-1 well (CLM x-1) at Tapi Aike, the deeper secondary target in the Anita Formation (D3) has recently been perforated and a mechanical stimulation will be commencing shortly.
This is expected to complete within the next two weeks. Once completed, attention will then focus on the shallower primary target (Magallanes 20 or Lobe C), with a perforation followed by a mechanical stimulation. This is expected to take a further two weeks.
Separately, following the previously announced mobilisation of the Petreven H-205 rig to the Palermo Aike production concession in the Santa Cruz Sur assets, the company has confirmed it has now spudded the Campo Lim- ite exploration well (CLix-1001). The well is expected to reach total measured depth within the next week, then to be followed by wireline logging operations.
Further announcements will be made, as appropriate, in due course.
Echo Energy, January 06 2020
Total enters Suriname
with 50% operated stake
in Block 58 under new
agreement with Apache
Total announced December 23 it has signed an agreement with Apache Corp to acquire a 50% working interest and operatorship in the highly prospective Block 58 offshore Suriname, further expanding Total’s footprint in the prolific Guy- ana-Suriname basin.
Block 58 is located on trend with the pro- lific discoveries in the adjacent Stabroek block in Guyana. The Maka-1 exploration well is currently being drilled on the block in a water depth of about 1,000 metres and preliminary results confirm the prospectivity of the license. Two additional exploration wells are planned to be drilled by Apache after the completion of Maka-1 before transferring the operatorship to Total.
“Total is pleased with this significant entry in Suriname, where Total will become operator and bring its deepwater expertise. The new license expands our positions in the Guyana-Suriname Basin, a highly favorable petroleum province,” said Arnaud Breuillac, President of exploration and production at Total. “We look forward to working alongside with Apache and Staatsolie, the national oil company.”
At closing, Total will pay a bonus of $100mn, plus its share of past costs. In the event that development is launched, Total will provide a reimbursable carry for a share of Apache’s cap- ital expenditure for the development phase and make some additional payments linked to the development and production. Cost of carry and payments would then represent an acquisition cost of around $2 per barrel.
Total, January 05 2020
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