Rockhopper Exploration PLC on Tuesday said it has signed a milestone farm-in deal at the Sea Lion project in the Falkland Islands. Rockhopper shares were 30% higher in early trade in London at a price of 19.44 pence each. Premier was 13% higher at 114.62p.
Heads of terms have been signed with Tel Aviv listed Navitas Petroleum LP, which is taking a 30% stake in the project. Rockhopper will hold 30% after the deal, and operator Premier Oil PLC 40%.
This transaction, Rockhopper said, increases the likelihood the project will be able to secure senior debt financing for the first phase of development.
Rockhopper's costs for phase one will be met by a combination of cash & carry loans from Premier and Navitas, it added. It will get up to US$ 48 million from the two partners in future depending on future phases of development.
This is a very important milestone both for the Sea Lion project as a whole and Rockhopper itself. We will be delighted to welcome Navitas to the Sea Lion project and regard their joining as an important catalyst as well as industry endorsement of Sea Lion's scale, said Rockhopper Chief Executive Samuel Moody.
Discussions are continuing to progress with senior lenders regarding project financing and should be positively supported by the transaction. We will update the market on the progress of those discussions in due course.
Rockhopper hopes for sale & purchase agreement to be signed during the first quarter of the year.