Rockhopper Exploration PLC (LON:RKH) said it is close to kicking off the first phase of development of the Sea Lion Field in the northern waters of the Falkland Islands.
At the company's annual meeting later investors will hear that it and partner Premier Oil PLC (LON:PMO), which holds 60% of the offshore acreage, are close to selecting a main contractor to carry out the work.
Needed first is US$400mln of vendor funding with negotiations on this key part of the process "near completion".
Comprehensive engagement with banks
"Following a comprehensive commercial bank market engagement process, with a number of banks expressing a desire to support the project, a pathfinder bank will be appointed imminently to assist with the arrangement of senior debt facilities for the project," chairman David McManus will tell the meeting.
His words echo those of Premier on Wednesday, which said it expects to appoint a pathfinder bank "shortly" to assist with the funding process.
Premier's financial distress, which saw it rack up huge debts related to the Catcher Field in the North Sea, has been the major drag on development of the asset, which was originally to have delivered first oil last year.
Back from the abyss
Premier, having battled back from the abyss, is now keen to exploit an asset that's host to an estimated 517mln barrels of crude.
With the Brent price now hovering around US$80 a barrel, after a years of sustained weakness, Sea Lion has never made more economic sense, analysts said.
Total costs are put at US$1.5bn, so the current round of financing is merely a start to the process.
Late last year, a report in the Financial Times suggested Premier is negotiating with the UK government to secure an export finance deal that would provide US$800mln of the total.
Greater Mediterrean also in focus
Rockhopper, meanwhile, owns assets in the greater Mediterranean area and is currently funding a four-well drilling campaign in Egypt, which should boost production.
A hearing involving the Italian government regarding the Ombrina Mare Field, in the shallow waters of the Adriatic, is scheduled for February 2019 with the outcome expected by the middle of next year.
The company is seeking significant damages from the authorities following the Ministry of Economic Development's decision not to award the company a production concession.
Chairman McManus said: "Rockhopper believes it has strong prospects of recovering very significant monetary damages - on the basis of lost profits - as a result of the Republic of Italy's breaches of the Energy Charter Treaty.
All costs associated with the arbitration are being met on a no-win-no-fee basis by a specialist arbitration funder.