AIM-listed Rockhopper Exploration, the oil and gas company with key interests in the North Falkland Basin ('NFB'), notes the update published this morning by the operator Navitas Petroleum LP, which holds its interests in the NFB through its indirect subsidiary Navitas Petroleum Development and Production Ltd, on Sea Lion development progress.
Additional FPSO
As previously disclosed in May this year, Navitas was investigating accelerating the development of subsequent phases of the Sea Lion development beyond phase 1 of the Northern Development Area ('NDA Phase 1'). Accordingly, Navitas (through a subsidiary) signed a Memorandum of Understanding ('MOU') for an additional FPSO. Navitas estimates this could increase Sea Lion production capacity by a further 125,000 bopd (43,750 bopd net to Rockhopper) and accelerate subsequent production phases when compared to current plans.
Navitas has today provided an update that it has (through a subsidiary) exercised an option to acquire the second FPSO, named the OSX-1, and the completion of the acquisition is expected during the coming month. The aggregate cost of acquiring the OSX-1 (excluding the anticipated upgrade costs) is approximately US$125 million. Navitas will initially be the sole owner through an incorporated special purpose vehicle and will bear 100% of the related costs until Rockhopper funds its share. Rockhopper is currently in discussions with Navitas about how the OSX-1 will be formally incorporated into its existing Sea Lion joint venture agreements.
Whilst the development of the NDA Phase 1 remains on track for first oil in Q1 2028, the plan set out by Navitas is for the OSX-1 to be used to develop the resources in the Central Development Area ('CDA') of the Sea Lion field, thereby accelerating production of these barrels. The CDA work programme is expected to include the drilling of 20 wells in CDA Phase 1 and 18 wells in CDA Phase 2, for a total of 38 wells. Navitas intends to submit the CDA Development Plan to the Falkland Islands Government for approval and to make a Final Investment Decision ('FID') in respect thereof in the first half of 2028. Navitas is targeting production from the development of CDA Phase 1 by the end of 2030.
Navitas Updated Independent Reserves and Resource Report
Navitas has today also provided an updated reserves and resources report prepared on its behalf by Netherland, Sewell & Associates Inc (NSAI), which incorporates the accelerated development plan for the CDA following the purchase of the OSX-1 (the 'Updated Navitas NSAI Report').
As set out in Navitas’s announcement this morning, the Updated Navitas NSAI Report, which uses long term Brent crude oil price of $76/bbl, shows the discounted cash flow attributable to Navitas increase approximately 39% when compared to the previous Navitas NSAI Report dated February 2026.
Rockhopper anticipates publishing a new NSAI report net to its 35% shortly which the Board believes is likely to show a similar proportionate increase in its own post tax NPV10 from the current estimate of US$2.2bn.
The Updated Navitas 2026 NSAI Report will be made available on Navitas’ website shortly.
Falklands Exploration
Navitas is considering various options for exploration activity during the upcoming drilling campaign for the NDA Phase 1. This may include an oil exploration well in the licence covering the Sea Lion discovery area and may also include the deepening of a development well to target the Gwendoline exploration prospect.
Progress in Development of the NDA Phase 1 of Sea Lion
Navitas reports other progress on the Sea Lion NDA Phase 1 development as follows:
- Development works in the Falkland Islands are progressing to plan and, at this stage, are focused on: (i) preparing the quay and the shore base that will serve the Project; (ii) constructing accommodation; and (iii) carrying out additional infrastructure works in preparation for the arrival of the drilling rig in the Falklands and commencement of drilling in early 2027.
- The manufacture of the long-lead items including flexible flowlines, wellheads, and subsea Xmas trees is continuing.
- The Aoka Mizu FPSO has been disconnected from the field it previously served and is on route to a shipyard in Southeast Asia, with its arrival expected in early September 2026.
Rockhopper’s Intention to Undertake an Equity Capital Raising
The purchase of the OSX-1, as noted above, will be undertaken by an SPV 100% owned by Navitas LP. Navitas and Rockhopper are discussing the optimal arrangement for how the acquisition of the FPSO might be structured between the parties. However, while these talks are ongoing, it is clear Rockhopper requires funding to be in place in order to take-up its pro rata ownership of the vessel (35%) and meet any associated pre-FID costs.
The Company has received strong indications of interest from existing shareholders and potential new investors to support the Company in the acquisition of its pro rata share of the OSX-1 and to fully participate in the consequential accelerated development of the CDA. Accordingly, the Company is actively considering a placing of new ordinary shares to new and existing investors (the 'Placing').
Following the updates to the AIM Rules for Companies announced earlier this month, the Company has decided to utilise a Capital Access Window. This is a voluntary pause to the trading of a company’s shares to make it easier for companies to reach a broader range of investors during a fundraise. From 7:45 a.m. BST today, the Company’s shares will enter a Capital Access Window until a further announcement is made detailing the results of the Placing.
In addition to the Placing, the Company is actively considering an open offer to all existing shareholders (the 'Open Offer' and, together with the Placing, the 'Capital Raising'), providing them with the opportunity to invest in the Company on the same economic terms as those investing in the Placing.
This announcement does not constitute an offer of securities in any jurisdiction. The Capital Raising, if implemented, will be the subject of further announcements, including the full terms and conditions of the Placing and Open Offer, respectively. Further announcements will be made as and when appropriate.
Samuel Moody, Chief Executive Officer of Rockhopper, commented:
'Today’s update from Navitas reflects its continued commitment to developing and accelerating Sea Lion, and the consequential significant enhancement of the Project’s value. We are working alongside Navitas to ascertain the optimal structure for Sea Lion’s participation in OSX-1 and are planning a Capital Raising to secure the required financing. We have already received positive indications of support for this financing and we look forward to updating the market in due course as appropriate.'
Source: Rockhopper Exploration
