Rockhopper Exploration, Harbour Energy and Navitas Petroleum have signed legally binding definitive documentation in relation to Harbour exiting and Navitas entering the North Falkland Basin.
Navitas will acquire Premier Oil Exploration and Production Limited, the company through which Harbour holds all of its Falkland Islands licences.
Navitas and Rockhopper plan to jointly develop the Sea Lion project, with Navitas as operator. Sea Lion will become Navitas’ largest operated development asset.
Upon completion of the transaction, Navitas will own 65% and Rockhopper 35% of the PL003, PL004, PL005, PL0032 and PL0033 licences in the North Falkland Basin. Rockhopper will own 100% (and be operator) of the PL011, PL012 and PL014 licences in the South Falkland Basin.
The majority of Rockhopper’s share of Sea Lion phase one related costs from transaction completion up to final investment decision (FID) will be funded through a loan from Navitas. Subject to a positive FID, Navitas will provide a loan to Rockhopper to fund two-thirds of Rockhopper’s share of Sea Lion phase one development costs. Funds drawn under the loans will be repaid from Rockhopper’s working interest share of free cash flow.
In the event that material progress towards a FID has not occurred within five years of completion of the transaction, Rockhopper can elect to remove Navitas from the Falkland Islands petroleum licences (should the licences still be in effect at that time) by repaying the pre-FID loan. Should material progress have been made, but a FID not achieved, then the five-year period can be extended by 12 months and then a further six months if certain project milestones have been achieved.
This transaction remains subject to completion pending regulatory approvals by the Falkland Islands government.