Rockhopper Exploration, Harbour Energy and Navitas Petroleum have signed a legally binding agreement that allows Harbour to exit and Navitas to enter the North Falkland Basin.

The North Falkland Basin hosts the Sea Lion oilfield, its satellite discoveries Casper, Casper South, Beverley, along with the Liz field, Zebedee, and Isobel Deep prospects.

Under the terms of the agreement, Navitas will purchase all the shares in Premier Oil Exploration and Production Limited (POEPL), an indirect subsidiary of Harbour.

Through its subsidiary POEPL, Harbour holds rights in the North Falkland Licences, PL003, PL004, PL005, PL032, PL033.

Rockhopper and Navitas will align their working interests across all the licences, to ensure that Navitas will hold a 65% stake and Rockhopper a 35%, with Navitas as operator.

Rockhopper Exploration CEO Samuel Moody said: “We are delighted to have signed definitive documentation to bring Navitas into the North Falkland Basin.

“Subject to regulatory consents, we believe this marks the start of a new exciting chapter for the Falklands, and for the Sea Lion project in particular. Navitas’ $1bn Shenandoah financing in 2021 proved their ability to fund challenging offshore oil and gas developments.

“Given this, coupled with a more positive oil price environment, we are very excited to have them as new partners and look forward to pushing ahead with Sea Lion, a world-class resource.”

The two companies will jointly undertake the development of the Sea Lion project, through a technical and financing plan that aims to achieve the first oil at a low cost.

Navitas will offer a loan to fund the majority of Rockhopper’s expenses related to Phase I of the Sea Lion project, till its final investment decision (FID), at an interest rate of 8% per annum (Pre-FID Loan).

The company will also provide an interest-free loan to Rockhopper, to fund two-thirds of its share of development costs, based on the achievement of positive FID.

Furthermore, Rockhopper holds the right to remove Navitas from the Falkland Islands petroleum licences by repaying the Pre-FID Loan, if the project does not progress towards FID within five years.