A project to produce oil off the Falkland Islands for the first time has taken another step forward after Rockhopper Exploration raised $142 million via London’s junior equity market.
The placing of new shares means that Rockhopper, which is developing the Sea Lion field alongside Israel’s Navitas Petroleum, has fully funded the equity portion of the $2.1 billion first phase of the project.
The new shares were placed at 53p, as an open offer that could raise an additional £7 million was also launched.
Sam Moody, the chief executive of Rockhopper, said that reaching a financial close on the development was “arguably the single most important day in our history since we made the Sea Lion discovery”.
“We now look forward to entering the development phase for the field with our partner and operator, Navitas, who have done an exceptional job both re-engineering the development and leading the financing,” he said.
Navitas owns 65 per cent of the project and Rockhopper the remaining 35 per cent.
The initial stage is expected to produce first oil by 2028 and is targeting 170 million barrels, with expected output of 50,000 barrels per day at its peak.
The Sea Lion field lies 136 miles north of the Falkland Islands, in the wild waters of the South Atlantic Ocean, and is thought to contain more than 900 million barrels of oil. The field lies about 1.6 miles beneath the seabed, in water depths of almost 1,500 feet.
The final investment decision on the project was announced on December 10 but the Sea Lion field was first discovered in 2010 by Rockhopper Exploration, which was co-founded by Moody in 2004.
The Falkland Islands government will take a 9 per cent royalty on revenues from the field and then 26 per cent corporation tax on profits. It is a British overseas territory but oil extraction in its waters is regulated and taxed by the islands’ government, with no involvement from Westminster.
Argentina, which disputes Britain’s sovereignty of the Falkland Islands, which it calls Las Malvinas, threatened legal action against oil companies in the region in the years after Sea Lion was discovered.