Rockhopper's plans to farm out a majority stake in its North Falkland interests to Premier Oil have been approved by the Falkland Islands government.

Premier is paying $231m for a 60% stake in Rockhopper's North Falkland Basin licences. An initial payment of $231m will be made in cash plus an exploration carry of up to $48m. Subject to field development plan approval it will also pay a development carry of up to $722m, bringing the total payment to $1bn.

Rockhopper's licence interests in the Falkland Islands include the Sea Lion development, pretty much the only licence area in the Falklands to show any commercial potential thus far. Premier will take over as operator of the Sea Lion development.

Premier Oil Exploration & Production will become the operator of production licences PL023, PL024, PL032, PL033 and area PL004b of production licence PL004 as a result of the farm-out deal announced in July.

JH

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