Premier looking to farm-down stake in Sea Lion oil project
Premier Oil is looking for a farm-out partner for its Sea Lion offshore oil development in the Falklands Islands.
The UK-based oil firm is operating the project with a 60 percent stake, with the remaining 40 percent currently held by Rockhopper exploration.
The company has been in talks to secure a loan to fund the development of the first phase of the 250 mmboe (gross) of resource in Phase 1 of the Sea Lion project.
In an update on the 22nd August, Premier reminded that it had recently signed a memorandum that might lead to the loan, adding it has also started a Sea Lion stake farm-down process, ahead of a final investment decision.
Loan feedback in the fourth quarter
“Premier has launched a formal farm-down process of its 60 per cent operated interest in Sea Lion to optimise its level of participation in the project,” the company said, adding that securing the financing for the project was the critical path to the Sea Lion sanction.
“The project is now in a period of lender due diligence which will entail, among other items, finalising the term sheets with potential senior lenders,” according to Premier Oil.
“Sea Lion Phase 1 will develop 250 mmbbls (gross) resources in PL032 (Premier 60 per cent operated interest), using a conventional FPSO based scheme, similar to Premier’s successful Catcher development.
“The project is at a mature stage of definition and has been substantially de-risked from a technical, cost and schedule perspective,” Premier said.
Premier’s partner Rockhopper said on the 22nd August that capex to first oil is estimated at approximately US$1.8 billion (gross). Furthermore, Rockhoppers said that key service and supply contracts were nearing final agreement in preparation for execution at Project sanction.
Sam Moody, CEO of Rockhopper, commented: “The Project continues to build momentum with significant progress being made across key areas, all with the aim of moving into the execution phase post sanction. The PIM submission in late July has kicked off the formal application process for the senior debt financing guarantees for which we expect initial feedback in the fourth quarter of 2019.”
Source: Offshore Energy Today