Under the Heads of Terms, which remains subject to regulatory approval, Harbour will divest its entire interests with the other partners looking to align their shares in all their Falkland Islands licenses to Rockhopper 35%, and Navitas 65%.
The two companies plan to jointly develop a technical and financing plan to enable Sea Lion to go forward and deliver first oil quicker and at lower cost, with Navitas operating the project on completion.
Rockhopper’s share of Sea Lion costs from transaction completion up to the final investment decision (FID) will be funded via a loan from Navitas, with the latter then providing a further loan to Rockhopper to fund two-thirds of its share of development costs (not met by third-party debt financing).
Should FID not take place within five years of the proposed transaction, Rockhopper has the option to repay the pre-FID loan and thereby remove Navitas from the licenses.
According to Rockhopper, the proposals would lead to greater alignment and simplified commercial arrangements, with the company holding a higher share of the Sea Lion project than prior to the previous Premier Oil-Navitas farm-in, announced in January 2020.
The alternative plan for the development will draw on the design/ engineering performed for the project in recent years.
Depending on funding requirements, an additional project partner could be brought onboard, although Rockhopper does not intend to reduce its working interest.
CEO Samuel Moody said: “The new Rockhopper-Navitas joint venture will be fully aligned and committed to bringing Sea Lion to production.
“We at Rockhopper have huge historic and detailed technical knowledge of the asset and experience of operating in the Islands, while Navitas brings significant proven capital raising expertise and ability as well as development experience.”