Premier to spend $5.2 Billion on Sea Lion development

Premier Oil, a UK-based independent oil and gas exploration company, has announced today that the cost for the first phase of the Sea Lion development in the Falkland Islands will amount to $5.2 billion.

The field will be developed via a Tension Leg Platform.  It is estimated capital costs (gross) for Phase 1 of the Sea Lion development will total $5.2 billion comprising $3.5bn for surface facilities and $1.7bn for drilling. Capital expenditure to first oil is expected to be $3.8bn. Annual operating expenditure (gross) is expected to average $260 million including Floating Storage Unit rental and well interventions.

Premier Oil expects to award the Front End Engineering and Design contracts in 2Q 2014 and to submit the draft Field Development Plan at the end of this year. Also at the end of this year, Engineering Procurement and Construction contracts will be awarded. Field sanction is anticipated in 2Q 2015. Premier said it would seek a partner for the field before the sanction. Phase 1 of the Sea Lion Development is expected to recover 293 mmbbl over 25 years.

Premier operates the field with 60% interest. Rockhopper owns 40%.