Sea Lion roars into Falklands expansion as Navitas reels in second FPSO

Navitas Petroleum, an Israeli oil and gas producer and developer that operates a project under development in the North Falkland Basin, is stepping up plans to expand its oil field project in the Falkland Islands through the acquisition of a second floating production, storage, and offloading (FPSO) vessel that could boost daily oil output capacity by thousands of barrels.

After investigating the possibility of accelerating the development of subsequent phases of the Sea Lion development beyond phase 1 of the northern development area (NDA Phase 1), Navitas signed, through a subsidiary, a memorandum of understanding (MOU) for an additional FPSO.

The company has now exercised an option to acquire the second FPSO, named OSX-1, with the completion of the acquisition expected during the coming month. The aggregate cost of acquiring the FPSO OSX-1, excluding the anticipated upgrade costs, is approximately $125 million.

Navitas will initially be the sole owner through an incorporated special purpose vehicle and will bear 100% of the related costs until its partner, Rockhopper, funds its share. The two partners are currently discussing how the FPSO OSX-1 will be formally incorporated into their existing Sea Lion joint venture agreements.

Navitas estimates this second FPSO could increase Sea Lion production capacity by a further 125,000 barrels of oil per day (bopd) and accelerate subsequent production phases when compared to current plans. The first two development phases are going to use the FPSO Aoka Mizu, which will have a production capacity of 55,000 bopd.

Following a final investment decision (FID), a financial close was secured for the Sea Lion oil project in the North Falkland Basin, which will require an investment of $1.8 billion to lay the groundwork for first oil and $2.1 billion to project completion.

While the development of the NDA Phase 1 remains on track for first oil in Q1 2028, the plan set out by the operator outlines that the FPSO OSX-1 will be used to develop the resources in the central development area (CDA) of the Sea Lion field, thereby accelerating production of these barrels.

The CDA work program is expected to include the drilling of 20 wells in CDA Phase 1 and 18 wells in CDA Phase 2, for a total of 38 wells. Navitas intends to submit the CDA development plan to the Falkland Islands government for approval and to make a final investment decision in the first half of 2028.

The operator, which is targeting production from the development of CDA Phase 1 by the end of 2030, also provided an updated reserves and resources report prepared on its behalf by Netherland, Sewell & Associates Inc (NSAI), which incorporates the accelerated development plan for the CDA following the purchase of the OSX-1.

The updated report, which uses a long-term Brent crude oil price of $76/bbl, shows the discounted cash flow attributable to Navitas increases by around 39% when compared to the previous one dated February 2026.

The company is considering various options for exploration activity during the upcoming drilling campaign for NDA Phase 1, which may include an oil exploration well in the license covering the Sea Lion discovery area and may also entail the deepening of a development well to target the Gwendoline exploration prospect.

Navitas has made progress on the Sea Lion NDA Phase 1 development and confirms that works in the Falkland Islands are progressing according to plan and are focused on preparing the quay and the shore base that will serve the project; constructing accommodation; and carrying out additional infrastructure works in preparation for the arrival of the drilling rig in the Falklands and commencement of drilling in early 2027.

The manufacture of the long-lead items, including flexible flowlines, wellheads, and subsea Xmas trees. is continuing, while the FPSO Aoka Mizu has been disconnected from the field it previously served and is en route to a shipyard in Southeast Asia, with its arrival expected in early September 2026.

Navitas and Rockhopper are discussing the optimal arrangement for how the acquisition of the FPSO OSX-1 might be structured between them. While these talks are ongoing, the operator’s partner has determined that it requires funding to take up its pro rata ownership of the vessel (35%) and meet any associated pre-FID costs.

The company has received strong indications of interest from existing shareholders and potential new investors to support it in the acquisition of its pro rata share of the OSX-1 and to fully participate in the consequential accelerated development of the CDA.

Samuel Moody, Chief Executive Officer of Rockhopper, commented: “Today’s update from Navitas reflects its continued commitment to developing and accelerating Sea Lion, and the consequential significant enhancement of the project’s value.

“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. We have already received positive indications of support for this financing and we look forward to updating the market in due course as appropriate.“

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