Rockhopper Exploration (AIM:RKH), which holds a 35% interest in the North Falkland Basin's Sea Lion field, said it intends to raise equity capital to fund its pro rata share of a second floating production, storage and offloading vessel (FPSO).
Operator Navitas Petroleum has exercised an option to acquire the vessel, named OSX-1, at an aggregate cost of approximately $125 million, excluding upgrade costs.
Navitas will initially own the vessel through a wholly-owned special purpose vehicle and bear all related costs until Rockhopper funds its share, with the companies still discussing how the asset will be folded into their existing joint venture arrangements.
The OSX-1 is earmarked to develop the Central Development Area of Sea Lion, adding an estimated 125,000 barrels of oil per day of capacity (43,750 bopd net to Rockhopper) and accelerating output beyond the first phase of the Northern Development Area, which remains on track for first oil in the first quarter of 2028.
Navitas plans to submit a Central Development Area plan for government approval and take a final investment decision in the first half of 2028, targeting first production from that phase by the end of 2030.
An updated reserves report by Netherland, Sewell & Associates, using a long-term Brent oil price of $76 a barrel, shows Navitas's discounted cash flow rising approximately 39% versus its February 2026 report; Rockhopper expects its own updated valuation, based on a current net present value estimate of $2.2 billion, to show a similar proportional increase.
Rockhopper said it has received "strong indications of interest" from existing and new investors and is considering a placing alongside an open offer to existing shareholders on the same terms.
"We are working alongside Navitas to ascertain the optimal structure for Sea Lion's participation in OSX-1 and are planning a Capital Raising to secure the required financing," said chief executive Samuel Moody.
News Intelligence what this means for the company
Rockhopper is raising equity to fund its 35% stake in a second FPSO for the Sea Lion field after operator Navitas exercised an acceleration option on the $125 million vessel OSX-1. The move unlocks an estimated 43,750 barrels per day net to Rockhopper and brings forward production from a second development phase to end-2030, with an updated reserves valuation showing a 39% uplift versus February 2026—but the capital raise terms remain unannounced, leaving the dilution impact and funding quantum unknown.
The acceleration of Sea Lion's second phase and the material reserves uplift strengthen the project's economics, but Rockhopper's ability to fund its pro rata share without excessive dilution is now the critical variable. The Italian asset sale to Zodiac remains legally in force but either party can now withdraw, leaving the company's liquidity position unclear ahead of the placing announcement.
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