Source - SMW
Rockhopper Exploration, an oil and gas company, has reported progress at its Sea Lion project in the North Falkland Basin. 

The project continues to move towards sanction at the end of this year, with work during the second half of 2017 focusing on progressing the commercial, fiscal and financing elements required to secure the US$1.5 billion of capex required to achieve first oil.

The joint venture continues to progress financing including through senior debt and subordinated contractor funding streams.

Letters of intent (LOIs) have been entered into with contractors for the provision of well services and certain logistical services; as well as for vendor financing for the Sea Lion Phase 1 development.

Under the terms of the LOIs, an exclusivity period has been granted to each contractor during which the joint venture will negotiate binding documentation based on agreed principles for the provision of both services and vendor financing. During Q1 2018, the joint venture expects to enter further agreements related to drilling and the subsea system, again covering both the provision of services and the balance of the targeted vendor financing.

During Q1 2018, the joint venture expects to commence a bank engagement process with the aim of establishing bank market appetite for the project. In order to support this, the process to select certain lender due diligence advisers (particularly in relation to subsurface and environmental matters), has started.

Current production from the Abu Sennan concession is stable at approximately 3,800 boepd gross (approximately 835 boepd net to Rockhopper) following a number of work over operations conducted during the second half of 2017.

Studies carried out in 2017 demonstrate a significant uplift in ultimate recovery is possible through the implementation of water injection and infill drilling on the Al Jahraa field. Discussions within the joint venture are ongoing with the aim of agreeing a work program and budget for the field in 2018.

In November 2017, Rockhopper completed a full review of the prospectivity of the Abu Sennan concession. A healthy inventory of prospects and leads has been identified, and Rockhopper anticipates one exploration well will be drilled in 2018, pending agreement within the joint venture of the work program and budget.

In March 2017 Rockhopper commenced international arbitration proceedings against the Republic of Italy in relation to the Ombrina Mare project. The Procedural Hearing for the arbitration took place in November 2017, Rockhopper submitted its memorial, witness statements and expert reports in December 2017 and the hearing has been scheduled for early February 2019.

Rockhopper believes it has strong prospects of recovering very significant monetary damages - on the basis of lost profits - as a result of the Republic of Italy's breaches of the Energy Charter Treaty.

In line with previous guidance, Rockhopper's year-end 2017 cash balance was US$51 million. 

At 8:33am: (LON:RKH) Rockhopper Exploration PLC share price was +0.78p at 25.68p