Navitas Petroleum is set to join the offshore Sea Lion project in the Falkland Islands through a farm in deal with Rockhopper Exploration and Premier Oil Exploration and Production.

The deal will see the Israeli oil and gas company take 30% stake in the offshore project, which is being developed in the North Falkland Basin.

In this connection, the three companies have signed a Heads of Terms agreement. After closing of the deal, working interests across the Sea Lion licences PL032, PL004b, and PL004c will be aligned with Premier Oil having an operated stake of 40%, while Rockhopper and Navitas Petroleum will each have 30% stake.

Rockhopper CEO comments on Navitas’ participation in the Sea Lion project

Rockhopper CEO Samuel Moody said: “Navitas add valuable offshore experience from their Gulf of Mexico projects and hugely successful prior personal involvement in Israel’s offshore sector.

“They also materially strengthen and enhance the prospects for a successful project financing, as clearly demonstrated by their success in funding other similar developments elsewhere in the world and with proven access to capital markets.”

In 2012, Premier Oil purchased a stake of 60% in the licence interests held by Rockhopper in the Falkland Islands, which includes the Sea Lion development.

In September 2019, Rockhopper said that the North Falkland Basin will be developed in a phased manner, starting with Sea Lion phase 1. The company said that it will commercialise phase 1 of the Sea Lion project by deploying a conventional floating production storage and offloading (FPSO) to tap into 250mmbbls of oil resources in the northern part of PL032.

A subsequent second phase development will aim at exploiting the remaining resources of around 280mmbbls in the PL032 licence and also in the satellite accumulations in the north of PL004 licence.

Rockhopper said that the farm in deal with Navitas Petroleum strengthens the joint venture, thereby increasing the probability of a successful senior debt project financing for phase 1 of the Sea Lion project.

The company expects a sale and purchase (SPA) agreement to be finalised during the first quarter of this year. Closing of the SPA, which will be subject to regulatory approval and satisfaction of certain conditions, is expected to occur in the second quarter of 2020.