FALKLANDS: Development prospects for Sea Lion gas
By J Brock (FINN)
Rockhopper Exploration has announced its semi-annual report on September 30, which follows Harbor Energy’s shocking announcement that it intends to exit the Sea Lion project in the North Falkland Basin.
Rockhopper however announced that “work will continue on several fronts in the coming weeks, including:
(1) Harbor’s orderly exit from the Falklands;
(2) advance plans for alternative, low-cost development of the Sea Lion; and
(3) continue discussions with Navitas Petroleum about their potential entry into the project.
Rockhopper highlights Harbor Energy’s announcement in September 2021 that the Sea Lion project does not fit its corporate strategy and therefore will seek to exit the project and its North Falkland Basin licenses.
Rockhopper will continue to pursue the Sea Lion project with a handover process and will shortly begin talks, which are already underway, with Navitas Petroleum regarding its potential entry into the Sea Lion project; the extension of the company’s North Falklands Basin oil licenses, including the Sea Lion Discovery Area, as of November 1, 2022.
As for the prospects, the formal exit by Harbor – Rockhopper plans to regain the operator and 100% working interest in the licenses of Sea Lion and in the most important of the North Falkland Basin, subject to authorization of design and engineering works undertaken for the project in recent years; then provides for the potential abandonment of the Sea Lion project in Navitas, and the expected outcome in relation to the Ombrina Mare arbitration, which requires significant financial compensation.
As regards corporate and financial activities, the continued focus on corporate costs led to a reduction in administrative expenses: 1.6 million US dollars of G&A in the first half of 2021 (first half of 2020: 2.7 million dollars); additional business cost savings implemented after the end of the period; cash resources of $ 7.1 million as of June 30, 2021.