Following finalization of work undertaken on both a technical and commercial level to support the financing of the project, Rockhopper claims that the total post-FID funding requirement is $1.8 billion to first oil and $2.1 billion to project completion, including contingencies and financing costs.
The company elaborates that the project financing consists of $1 billion of senior debt, of which $350 million is the firm’s debt, with the balance provided via a combination of joint venture equity and post first oil cash flows.
Rockhopper benefits from previously disclosed financing loans from Navitas in relation to the project and, as a result, the firm’s net equity requirement is approximately $102 million, besides the previously disclosed share of a 5% equity overun support which is around $10 million, with a total in aggregate of $112 million.
The potential value of the Sea Lion project proceeding is highlighted in the recent independent resource evaluation conducted by Netherland, Sewell & Associates, Inc. (NSAI) on behalf of Rockhopper, which confirmed total gross full field 2C resource of 917 mmbbls of which 321 mmbbls are attributable to the company’s net working interest.
Sea Lion will be developed in phases . As a result, Phase 1, which has been sanctioned, targets 170 mmbbls (59.5 mmbbls net to Rockhopper) at a peak production of approximately 50,000 bbls/d. The subsequent phases are expected to be self-financing using the excess cash flows of Phase 1.
The first oil from Phase 1 is currently planned for 2028. Phase 2, which forms part of the same FDP approved by the government, is anticipated to recover a further gross 2C resource of 149 mmbbls (52.15 mmbbls net to Rockhopper). Currently, it is anticipated that the first well will not be drilled for over 12 months.
Navitas has entered into several commercial contracts which include, but are not limited to, an FPSO charter agreement and associated EPC and O&M contracts, alongside drilling rig contract, a framework agreement for the supply of drilling and completion services; and an agreement for the engineering, procurement, construction, installation and commissioning of subsea umbilicals, risers, and flowlines (SURF).
As part of the FID process, Rockhopper and the Falkland Islands’ government have entered into a final settlement agreement related to a previously disclosed disputed taxation amount on the farm out to Premier Oil in 2012, as the existing arrangement was incompatible with achieving the FID at Sea Lion. The final settlement agreement will also settle any tax liability in relation to the farm out to Navitas in 2022.
The new arrangement states that the firm will pay the tax liability in instalments, amounting to £30 million on an undiscounted basis. Navitas Petroleum, which sees Sea Lion as “the next big thing,” is the operator of the project with a 65% working interest while Rockhopper holds the remaining 35% stake. Material upside, including Isobel-Elaine , a discovered oil field to the south of Sea Lion, was identified and could be developed under future phases.
Navitas Petroleum Development and Production (NPDP), a subsidiary of Navitas Petroleum, has confirmed the final investment decision for the Sea Lion field development, which is expected to support significant long-term skilled engineering, management, manufacturing, and operations jobs across the UK supply chain over the next 30 years while benefiting the Falkland Islands economy.
The Sea Lion field has 319 million barrels of certified resources, and the initial stage entails drilling 11 subsea wells tied back to a redeployed FPSO vessel. Phase 2 will add a further 12 wells, expected within three years of first oil. NPDP will open an office in Aberdeen in early 2026 to work in conjunction with its London and Stanley teams to deliver Phase 1 of the development.
Ian Ramsay , NPDP Chief Operating Officer (COO), underscored: “The UK and Falkland Islands’ supply chain has already successfully delivered 29 exploration and appraisal wells in the region. The development will be progressed to industry and regulatory standards and create jobs both in the UK and the Falklands.
“We will be responsible and respectful custodians of the Sea Lion field throughout its lifetime. The potential to enhance the economy of the Falklands and responsibly open up a new production basin is an opportunity that provides us all with immense motivation.”