The overall strategy to develop the North Falkland Basin remains a phased development solution, starting with Sea Lion Phase 1, which will commercialise, through a conventional FPSO development scheme, 250 mmbbls (gross) of oil resources in the northern part of PL032 (in which Rockhopper has a 30% working interest post farm out to Navitas). A subsequent Phase 2 development will commercialise the remaining approximately 280 mmbbls (gross) resources in both PL032 and the satellite accumulations in the north of PL004b/c (in which Rockhopper has a 30% working interest post farm out to Navitas). In addition, there is a further 200 mmbbls (gross) of low risk, near field exploration potential which could be included in either the Phase 1 or Phase 2 developments. Phase 3 will entail the development of the Isobel/Elaine fan complex in the south of PL004a, subject to further appraisal drilling.
The resources in Sea Lion Phase 1 will be commercialised utilising a conventional FPSO development scheme with approximately 29 subsea wells. Estimated gross capex to first oil is US$1.8 billion. The Sea Lion financing plan comprises funding elements including senior project finance debt, vendor financing from contractors and equity from the joint venture. Rockhopper’s share of the joint venture equity is to be funded through the financing arrangements with Premier and/or Navitas.
Sea Lion has the potential to be transformational for Rockhopper and the Falkland Islands as a whole. The project is at a mature stage of definition and through the FEED and optimisation process has been substantially de-risked from a technical, cost and schedule perspective. Securing funding is the last remaining major milestone before Sea Lion can reach FID and all efforts are focused on securing such financing to allow the project to move into the execution phase.
Constructive and supportive engagement with the Falkland Islands Government (“FIG”) continues on a range of environmental, fiscal and regulatory matters with a view to obtaining the consents and agreements necessary to reach a final investment decision. Formal approval of the Environmental Impact Statement (“EIS”) and Field Development Plan (“FDP”) are expected at sanction.
The Sea Lion Discovery Area is due to expire on 1 May 2021. An extension to the Sea Lion Discovery Area licence is currently being sought.