Harbour Energy (LSE:HBR) PLC is walking away from Rockhopper Exploration PLC (AIM:RKH)’s Sea Lion oil project in the Falklands.
Harbour, formed in April with the merger of Premier Oil and Chrysaor Holdings, decided Sea Lion is ‘not a strategic fit’ for the new company.
It is now exploring options to exit the Sea Lion oil field development project as well as its other license interests in the Falkland Islands. AIM-quoted Rockhopper says it is still committed to the project.
“This represents both a difficult moment for Rockhopper and a huge opportunity,” said Rockhopper chief executive Sam Moody.
“Whilst we are disappointed that Harbour has decided to not to proceed with Sea Lion, we remain committed to unlocking its development.”
Rockhopper is in talks with Israeli oil firm Navitas (ASX:NVT) Petroleum, which in early 2020 papered an early-stage agreement to take a 30% in Sea Lion. The timeline to that deal had extended out until September 30.
In a statement, Rockhopper noted that Navitas (ASX:NVT) was recently bolstered by a US$900mln funding and gave a green light to the Shenandoah project, new deep-water development in the Gulf of Mexico, hinting at its would-be partner’s appetite for investment in the current environment.
“Navitas (ASX:NVT)’ recent financing on its Shenandoah project demonstrates that funding remains available to independent E&Ps in the international markets for large-scale offshore oil developments and we very much look forward to working with them to progress Sea Lion,” Moody said.
In the meantime, Rockhopper said it will now work with Harbour and the Falkland Islands Government to ensure an orderly exit by Harbour from the Falkland Islands.