JHI Associates is advancing work on its Falkland Islands asset by partnering with Navitas Petroleum, marking a strategic expansion beyond Guyana, where JHI has a stake in the Canje block.
In a shareholder update dated January 12, JHI said it has signed a non-binding head of terms with Navitas under which the privately held energy company would farm into JHI’s PL001 license in the North Falkland Basin and assume operatorship, subject to due diligence and regulatory approvals.
PL001 lies adjacent to Navitas’ Sea Lion project, an oil development in the Falklands, with 319 million barrels of certified resources, JHI said. The first phase of Sea Lion is designed to reach peak production of about 50,000 barrels per day (b/d) and is expected to come on stream in the first half of 2028.
JHI sees the proximity of PL001 to Sea Lion as important to underscoring the license’s potential, particularly given Navitas’s role as operator of the neighbouring development.
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“Their technical understanding of the North Falkland Basin and the ability to commercialize any discoveries on JHI’s PL001 license via potential tiebacks to planned Sea Lion infrastructure are unmatched,” JHI said.
Under the proposed terms, Navitas would acquire a 65% participating interest in PL001, fund JHI’s share of costs for an exploration well and a potential appraisal well up to an agreed cap, and reimburse a pro-rata share of JHI’s past costs. JHI would retain a 35% interest. A loan provided by Navitas would be repaid from a portion of JHI’s future free cash flow from production.
The companies have agreed to an exclusivity period to finalize definitive agreements.
The move is key for JHI, which until 2023 held a 17.5% stake in the Canje Block offshore Guyana. That year, JHI acquired a 100% working interest and operatorship of PL001 from Argos Resources, giving it operatorship.
ExxonMobil, the operator of the Canje Block, drilled three wells in 2021 and encountered no commercial hydrocarbons.
