MercoPress. South Atlantic News Agency

Falklands, growing hydrocarbons oil activity and funding for the Sea Lion oil project

The first phase of the Sea Lion project is targeting 170 million barrels of oil via the redeploying floating production, storage and offloading vessel Aoka Mizu.

Rockhopper Exploration half year results indicate that the UK oil and gas company is more hopeful than ever that a final investment decision will come this year on the Sea Lion oil project in the Falkland Islands, after it secured a successful capital raise of up to US$ 140 milliom. Rockhopper holds a 35% interest in the project with the Israeli operator Navitas Petroleum holding the remaining 65%.

The financing plan for phase one of Sea Lion, (in the North Falkland basin) - which will be the Falklands' first offshore oil development - has a total capital requirement of US$1.66 billion from FID (Final Investment Decision) to first oil, and US$2.05 billion from FID to project completion, Of this, it is anticipated that US$1 billion will come from a senior secured financing facility.

The Sea Lion project has a best estimate resource of 730 million barrels to be developed in several phases. And the first phase is targeting 170 million barrels of oil via the redeploying floating production, storage and offloading vessel Aoka Mizu.

The second phase targets an additional 144 million barrels to be developed through the same FPSO.

Production is targeted to peak at 55,000 barrels per day of oil, with subsequent phases to be developed via a separate FPSO. Rockhopper said the last few months had seen “an acceleration of progress towards FID” expected before the end of 2025.

Samuel Moody, CEO of Rockhopper, commented: “This has been a transformative period for Rockhopper and the last few months have seen an acceleration of progress towards FID.  A financing plan is in place for which we have secured our base equity requirement and the potential value to all stakeholders is independently confirmed.

“We are very grateful for the support of shareholders, both existing and new, at the recent fundraise. Having passed all of resolutions at the recent General Meeting, US$140 million is now in escrow pending FID, which we are more hopeful than ever of reaching by the end of this year.”

Borders & Southern Petroleum seeking farm-in partner

In related news, UK based Borders & Southern Petroleum with a large offshore gas and condensate discovery in the Falkland Islands is seeking a farm-in partner to help fund appraisal drilling and development.

Borders & Southern Petroleum owns 100% of the Darwin discovery, which it claims holds an unrisked best estimate of initial in-place resources of 3.2 trillion cubic feet of gas plus more than 400 million barrels of condensate and liquid petroleum gas. The deep water field sits in 2000 metres of water.

Borders & Southern said in its half-year results it has hired the investment bank Houlihan Lokey to run the farm-out process for Darwin.

“Darwin continues to elicit fresh and renewed interest from potential tier one industry partners and we are delighted with the progress that Houlihan Lokey...is making,” said chief executive Harry Baker.

“We have noticed the continued positive statements from Navitas with regards to the Sea Lion development and recent fund raising by both Navitas and Rockhopper. Final investment decision on Sea Lion is expected in Q4 of this year and this will undoubtedly be a major catalyst for the Falkland Islands basin and thus us.”