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…. «Likewise, Slater said Rockhopper had found the right partner in Navitas, which is listed on the Tel Aviv Stock Exchange and is growing with a focus on the US Gulf of Mexico.

Slater pointed to Navitas' track record finding the external money for the Shenandoah project in the Gulf.

He also highlighted Navitas’ own internal funding.

“The company has a relatively limited amount of production just now, but Shenandoah is due on stream around the end of 2024 and should add 39,000 (bpd) net for them — a huge uptick in production and cash flows which they can then redeploy into Sea Lion.”

Navitas Petroleum was not available for comment, while a spokesperson for Rockhopper said the UK company is not looking to farm down any of its 35% working interest before a final investment decision.»

…… «It is understood Navitas has identified suitable and available redeployable existing FPSOs with a disconnectable turret mooring system, and is working to secure all long-lead equipment.

FPSO market sources said there are not many redeployable FPSOs built for the marine conditions in the South Atlantic Ocean, and Upstream has not yet identified the FPSOs being targeted by Navitas.

The Falklands feelgood factor

The Sea Lion project has been a stop-start affair for years, but market analysts following Rockhopper are happy about recent progress and believe steps are being taken to mitigate project risks.

In addition, the Falkland Islands administration is understood to be very satisfied with the work done by Navitas in the past six or seven months.

Rockhopper — headed by chief executive Sam Moody — and Navitas are about to begin a crucial phase of the regulatory approvals process with an updated environmental impact statement due to be submitted to the government in the first quarter this year, and an updated field development plan just recently submitted, according to Rockhopper.

"I’m quite bullish on Sea Lion as it looks like it will (finally) happen. The recent upgrade to resources recoverable from initial development was clearly a positive, and while revised development with a smaller FPSO and thus lower plateau production may have disappointed, it makes commercial sense with rising costs," Panmure Gordon director Ashley Kelty told Upstream.

“It’s a remote development that will clearly have its logistical challenges, but with the most recent development plan they are starting relatively small, and there is huge upside if they are able to add subsequent phases on the back of initial production. This upside helps account for the initial risk,” Zeus Capital analyst Daniel Slater told Upstream.

Is there any political risk ?

In terms of assessing the political risks to the project; specifically the Falkland Islands' history with neighbouring Argentina, one well-placed market source said project finance could be a big challenge.

In response, Kelty told Upstream: “Financing is a risk — but is the same for any project — but I don’t see country risk as being as great as some think.”

Https://www.upstreamonline.com/exclusive/sea-lion-roars-falkland-islands-first-project-picks-up-speed/2-1-1590214

Https://navitaspet.com/wp-content/uploads/2024/01/NSAI_report_sea_lion_isa-01.2024.pdf

Not really sure what this is about but found it amusing (or promising?)

Comments welcome.

N

https://www.macroaxis.com/forecast/RCKHF

Celle

I posted this bit from Canaccord not so much because of their price target but for the following which I think is important:

———

“The most significant change compared with the last CPR (March 2023) is that the development scenario has been tailored to fit the identified-and-available FPSO's parameters so providing, we think, a much better real-world basis for the development plan. In turn, we believe that is likely to be a better starting point for securing the development funding required. “

«Sea Lion update - revised development plan fits the (available) kit

Canaccord Genuity view:

Navitas, the operator of the Falkland Islands Sea Lion (Navitas, 65%, operator; Rockhopper, 35%) oil development project has published an updated Competent Person's Report (CPR) on the field. The most significant change compared with the last CPR (March 2023) is that the development scenario has been tailored to fit the identified-and-available FPSO's parameters so providing, we think, a much better real-world basis for the development plan. In turn, we believe that is likely to be a better starting point for securing the development funding required. Navitas continues to target Sea Lion phase 1 final investment decision in 2024.

Speculative BUY 34p»

——————

N

Back in August Bluewater said they had been awarded a feasibility study for their Munin FPSO (which I think will be our FPSO) and they could very well have advanced to FEED now. After FEED we will get FID (when funding has been sorted and go ahead by relevant authorities) which then kickstart the Detailed Engineering/procurement

Buffet

Correct

Note that from the latest RNS FEED is ONGOING as I understand it.

“ Front end engineering design ("FEED") is ongoing evaluating potential for further accelerated production ramp up and increased capacity.”

https://www.londonstockexchange.com/news-article/RKH/sea-lion-and-corporate-update/16297497

LTT

“ Navitas have not just been a breath of fresh air, they have been a typhoon of it” ….. well said!

N

Well maybe it will be a blessing in disguise in the long run as I’m sure the UK gov would have attached an awful lot of terms and conditions (and bureaucracy) to them guaranteeing the bond.

N

Near 1.5 billion dollars has been spent on the project already paid for mostly by Premier. This means Navitas can offer any new partner very good terms. Let’s say the new partner comes in for 20% share:

- Normally he would be expected to pay for past costs (20% of $1.5 billion)

-He would normally also be expected to pay for an outsized share of development costs (say 30% of 1.2 billion)

- This would be a total of $660 million.

Because of past cost already paid for by Premier now Navitas could offer the new partner to come in without paying for past costs. Surely this must be lucrative for anyone looking to earn some money?! (Except woke financiers in Europe and particularly London)

N

Canaccord Genuity: speculative Buy target - 37p

Zeus Capital: Total Risked NAV - 47p

Bot updated since yesterdays news

Fecm

Sticking to my 50p but obviously hoping it will be higher :)

Https://www.offshore-mag.com/field-development/article/14303920/navitas-assessing-fpsos-for-phase-1-offshore-falklands-sea-lion-project

109 million barrels 2C net to Rockhopper very very likely to be developed in the near future and we still have a market cap of only around £72million? This will change now soon!

LTT

Agree.

Also:

“For the Munin, a separate feasibility study had been awarded to Bluewater. “

So they have been working on this with Bluewater since August and must now be confident on the way forward.

From Upstreamonline in August last year:

Bluewater optimistic about redeployment of two idle FPSOs

Studies funded by clients under way for Glas Dowr and Munin floaters

Client interest: the Aoka Mizu FPSO at the Lancaster field in the UK.

Client interest: the Aoka Mizu FPSO at the Lancaster field in the UK.Photo: BLUEWATER

Russell Searancke

Updated 23 August 2023, 10:20

Bluewater has secured early engineering work for its two idle floating production, storage and offloading vessels that could lead to new contractual assignments.

Chief executive: Bluewater's Hugo Heerema.

Chief executive: Bluewater's Hugo Heerema.Photo: BLUEWATER

The Dutch floating production giant has two FPSOs that are both in lay-up at locations in Asia — the Munin and Glas Dowr.

Bluewater said in a results conference call on Tuesday it had been awarded a pre-front end engineering and design study contract with a value of $1.4 million from a client for the Glas Dowr FPSO.

For the Munin, a separate feasibility study had been awarded to Bluewater.

In addition, the Dutch company said there is interest in the Aoka Mizu FPSO, which is currently working on the Lancaster field in the UK North Sea.

Customer interest is highest in the Glas Dowr, and the company is hoping the next step will be to move into the FEED stage on one of the floater's opportunities.

As for the Aoka Mizu, even though the FPSO is active, Bluewater said it has been made available for marketing purposes which led to the led to the pre-FEED study being awarded.

In parallel, Bluewater is in discussions with the operator of the Lancaster field — Prax Group — regarding the FPSO situation.

So this might be our (first) FPSO

https://www.bluewater.com/wp-content/uploads/2021/03/BLW_FPSO_munin_folder.pdf

This will be a newbuild vessel, which is likely to be owned and operated by Inpex and its partners rather than leased from an FPSO contractor, unlike many of the region’s other FPSO projects.

Due to Indonesia’s local content requirements, the topsides for the Abadi FPSO will be constructed in the republic but this stipulation means overseas contractors such as Seatrium, McDermott and Saipem can vie to build the topsides at their subsidiary companies’ yards there.

Inpex is understood to have held a pre-qualification meeting late last year with prospective bidders for the Abadi FPSO.

Exploiting Tuna

Also offshore Indonesia, Harbour Energy wants an FPSO to exploit its Tuna oil and gas discovery, located near the maritime border with Vietnam.

Front-end engineering and design work for Tuna could commence this year but the exact timing of this floater tender remains unclear, as Harbour moves to bring onboard a new partner or partners to replace the departing Zarubezhneft of Russia.

Sources have pegged the processing capacity of the Tuna FPSO at 30,000 bpd of liquids and 135 MMcfd of gas. The operator will be offering an eight-year charter, with likely extensions of up to three years, Upstream understands.

Another FPSO could also be on the cards for Thailand if US supermajor Chevron finally gets its on-off Ubon gas condensate project off the drawing board.