Rockhopper Exploration boosted as Falkland deal advances

Rockhopper Exploration PLC shares jumped as much as 17% in early trading as a deal in the Falklands between Harbour Energy and Israeli oil firm Navitas Petroleum advanced with the signing of binding documents.

Navitas is acquiring Harbour’s stake in the Sea Lion oil field development project (35% owned by Rockhopper) through the transaction which is expected unlock the project which was otherwise on the back-burner for the company formerly known as Premier Oil.

The plan is for Rockhopper and Navitas to jointly develop and agree a technical and financing plan to take the Sea Lion field into production on a lower cost and expedited basis.

It will start with Navitas providing a loan to Rockhopper, to fund the small-cap partner’s share of costs up until the new Sea Lion final investment decision (FID) through a loan carrying 8% interest. After that, it is expected that the Israeli partner will provide two-thirds of Rockhopper’s share of field development costs through an interest-free loan.

"We are delighted to have signed definitive documentation to bring Navitas into the North Falkland Basin,” said Sam Moody, Rockhopper chief executive.

“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' US$1 billion 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."

Separately, Rockhopper noted that proceedings in an arbitration over the Ombrina Mare field, in Italy, are expected to be closed in “the next few weeks”. The company said that it continues to believe it has strong prospects of recovering very significant monetary damages through the process.

At the end of March, the company said it had US$3.9mln of cash and noted that it would require further funding for working capital and to achieve FID at Sea Lion.

In London, Rockhopper shares were changing hands at 9.84p after touching 11.00p in earlier trading.

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