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LatAmOil FALKL AND ISL ANDS LatAmOil

Rockhopper says Navitas still

keen on Sea Lion farm-in deal

ISRAEL’S Navitas Petroleum is reportedly still
intent on proceeding with a farm-in deal that
will allow it to become a shareholder in PL032,
a block off the coast of the Falkland Islands that
contains the Sea Lion oilfield.
According to Rockhopper Exploration (UK),
which owns a 30% stake in PL032, Navitas has
said it remains committed to its plans in the
wake of a proposed merger between another
two UK-based firms, Premier Oil and Chrysaor
Holdings. Premier has a 60% equity stake in the
block and is acting as operator of the project.
Chrysaor is not currently active in the South
Atlantic but holds licences for multiple fields off
the coasts of Norway and the UK.
Premier and Rockhopper had said in March
that they hoped to finalise the farm-in deal with
Navitas by the end of June. At that time, the par-
ties were discussing plans for Navitas to take a
30% stake in PL032, with 20% coming out of
Premier’s 60% share and 10% coming out of
Rockhopper’s 40% share. The pace of negotia-
tions between the parties slowed down during
the spring, though, especially after Premier cut
spending and temporarily halted work at Sea
Lion in response to the sharp decline in world Sea Lion may hold 1.7bn barrels of oil in place (Image: Premier Oil)
oil prices.
Even so, the deal is still under discussion, licences for PL032 and PL004. Those licences
and the companies have agreed to extend the are due to expire in May 2021, it noted.
period during which Navitas has the exclusive Samuel Moody, Rockhopper’s CEO, com-
right to negotiate for a stake in the project. “In mented: “We will work closely with all stake-
order to enable the merger to complete and the holders over the coming months to maximise
new management of the combined entity to the chance of securing the farm-out and project
make a firm decision on the Sea Lion project, sanction of Sea Lion. We believe that the oppor-
Rockhopper, Premier and Navitas have agreed tunity to invest in a 500mn barrel fully appraised
to extend the exclusivity period for the farm-in and engineered project with material additional
to the earlier of (i) September 30, 2021; (ii) the upside at this point in the cycle presents a com-
execution of definitive transaction documents, pelling opportunity, and one which would lead
or (iii) a decision by Navitas not to proceed with us towards unlocking the value within the pro-
the farm-in,” the statement explained. ject long-awaited by all stakeholders.”
Rockhopper did not say whether it expected According to previous reports, Premier and
to wrap up talks before the new deadline. It Rockhopper expect to spend about $1.8bn to
did state, however, that Premier would con- develop the PL032 block, which lies in the North
tinue to shoulder its share of costs incurred at Falkland Basin. The partners found oil at the
Sea Lion, “under the same terms as previously Sea Lion section of the block in 2010 and said
announced.” in 2014 that they hoped to begin production at
Additionally, it reported that the partners the field, which may hold 1.7bn barrels of oil in
were continuing discussions with the govern- place (OIP), in about five years. They have yet
ment of the Falkland Islands over the possibil- to take a final investment decision (FID) on the
ity of extending the term of their exploration project, though. ™

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