Rockhopper agrees acquisition of second FPSO for Sea Lion project
Rockhopper Exploration PLC on Wednesday said it has agreed to acquire a 35% interest in OSX-1 floating production, storage and offloading vessel.
The oil and gas exploration and production company with a joint interest in the Sea Lion project, said its 35% pro rata participating interest in OSX-1 was with Navitas Petroleum Development & Production Ltd, the operator and joint interest owner of the Sea Lion project.
Rockhopper said its 35% pro rata participating interest in OSX-1 is alongside Navitas Petroleum Development & Production Ltd.
The agreement will see Rockhopper subscribe for USD44.0 million of ordinary shares in the a newly incorporated special purpose vehicle who owns OSX-1 FPSO.
The company is not named and has no material trading history or other business activities.
Rockhopper said it would fund the purchase from existing cash resources. The subscription represents Rockhopper's 35% share of the previously disclosed aggregate acquisition cost of approximately USD125 million.
Rockhopper expects to incur net holding costs of approximately USD1.4 million per year, attributable to its 35% interest.
In May, Navitas said an additional FPSO could increase Sea Lion's production capacity by a further 125,000 barrels of oil equivalent per day as part of plans to accelerate development of the project.
In August, Navitas confirmed it had exercised an option to acquire a second FPSO, OSX-1.
On Monday, Rockhopper noted that Navitas was replacing two contractors amid Argentina's sanctions over Sea Lion, after the contractors were found to be in breach of their obligations. Navitas said it expected "no material adverse effect on the project".
The decision followed threats made by Argentine President Javier Milei regarding what he deemed the "illegitimate exploitation" of activities in the Falkland Islands.
Shares in Rockhopper were down 0.3% at 50.17 pence per share on Wednesday afternoon in London.
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