The Rockhopper (RKH)/Premier Oil (PMO) joint venture (JV) has submitted the preliminary information memorandum (PIM) to potential providers of senior debt project finance for the Sea Lion development. Submission of the PIM is supported by independent expert reports covering a range of technical, legal and tax aspects of the Sea Lion project. The JV views this as a material milestone and anticipates moving into detailed lender due diligence and documentation in Q419. In June, Italy's request for the suspension of the Ombrina Mare arbitration was rejected. RKH is seeking significant monetary damages and an award is now expected in Q120. Confirmation of Sea Lion FID and a successful arbitration outcome for Ombrina Mare have the potential to close the gap between the current share price and our valuation. We continue to assume a Sea Lion phase 1 first oil date of mid-2024, with our risked valuation standing at 79.6p/share.
Sea Lion PIM submission is material step forward for the project’s development and is a sign of commitment to it from both RKH and PMO. The JV has been engaging senior lenders and export credit agencies over the last 18 months and we understand the JV has been encouraged to make the submission at this time. The JV expects initial feedback on the PIM submission in Q419. The timeline for securing project finance and the Sea Lion final investment decision (FID) remains uncertain. We expect to revise our assumed mid-2024 Sea Lion first oil date in H219 once there is further visibility on funding.
RKH has signed a sales purchase agreement (SPA) for the sale of its 22% interest in Abu Sennan, Egypt to United Oil & Gas for a total consideration of $16m. This is broadly in line with our last published valuation of the asset at $15.2m and above RKH’s net book value of $13.8m as of December 2018. The transaction is expected to complete during Q419 with an effective date of 1 January 2019.
Our valuation suggests that the equity market continues to apply a c 20% chance of success (CoS) for Sea Lion Phase 1, which we believe is low considering the JV’s continued progress. Our broadly unchanged risked valuation stands at 79.6p/share based on a Sea Lion Phase 1 CoS of 55%. We provide sensitivities to Phase 1 CoS and will publish a more detailed review once funding has been secured.