Rockhopper Exploration and Navitas Petroleum have taken the final investment decision (FID) for the development of Phase 1 of the Sea Lion field in the North Falkland basin.
The companies have approved the necessary financing arrangements, with financial close expected in the coming weeks subject to customary conditions.
The decision follows approval from the Falkland Islands Government (FIG) for the field development and production programme, moving the licences into an exploitation phase valid for 35 years.
The total post-FID funding requirement is estimated at $1.8 billion to achieve first oil, rising to $2.1 billion for project completion.
Project financing comprises $1 billion of senior debt, of which Rockhopper holds $350 million. The remaining funding will be provided through joint venture equity and post-first oil cash flows. Rockhopper estimates its net equity requirement at approximately $102 million, plus a share of equity overrun support.
Phase one of the development targets 170 million barrels of oil, with peak production estimated at approximately 50,000 barrels per day. First oil is currently scheduled for 2028. A second phase is anticipated to recover a further 149 million barrels.
As part of the sanctioning process, Navitas, serving as operator, has executed key commercial contracts, including an agreement for a floating production storage and offloading (FPSO) vessel, a drilling rig contract, and agreements for subsea infrastructure.
Rockhopper also announced a settlement with FIG regarding a historical taxation dispute related to a 2012 farm-out. The company will pay a total liability of £30 million ($40 million) in instalments, commencing with £1 million upon signing and concluding with payments through the fifth anniversary of first oil.
