Rockhopper Exploration (LON: RKH) shares plunged on Thursday after Harbour Energy announced it would not proceed with the Sea Lion project.
The Sea Lion project, with independently audited 2C resources over 500 million barrels, was discovered and appraised by Rockhopper as the operator.
Rockhopper said that it plans to continue to pursue the development of Sea Lion. It is currently in discussions with Navitas Petroleum about potentially entering the project.
Navitas and partners recently raised project financing over $900 million and took a final investment decision on the 330 million barrel deep-water Shenandoah project in the US Gulf of Mexico.
A previously announced Heads of Terms with Premier Oil and Navitas will expire on 30 September 2021. If it does expire, Harbour will have an initial 90 days to decide how to continue with their exit. Rockhopper will continue to be funded by Harbour during that period.
Sam Moody, CEO of Rockhopper, commented: “This represents both a difficult moment for Rockhopper and a huge opportunity. Whilst we are disappointed that Harbour has decided to not to proceed with Sea Lion, we remain committed to unlocking its development.
“Navitas' 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.”
Rockhopper shares have plunged on the news, falling to a low of 4.5p. They are currently trading at 5.6p, down 34% from Wednesday's close.
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