Further letters of intent for drilling and subsea-related work are due to be dished out this quarter on the first phase of Premier Oil's Sea Lion field project off the Falkland Islands after the recent award of similar provisional deals, according to partner Rockhopper Exploration.

The London-listed player said the pair have already entered into LoIs with unnamed contractors for provision of well and logistical services, while in parallel seeking supplier-backed financing for the $1.5 billion phase one of Sea Lion in the North Falkland basin.

Rockhopper said they are also pursuing export credit financing and intend to engage in talks with banks “with the aim of establishing bank market appetite for the project”.

The partners have previously held talks with UK Export Finance, the UK’s export credit agency, for debt financing of $800 million, while also seeking to raise another $400 million from contractors in connection with the tendering process.

A new draft field development plan submitted to the government of the British overseas territory in the South Atlantic in November last year is presently under discussion, while a 42-day public consultation period on an environmental impact statement is due to start this month.

Rockhopper said in an update the Stanley administration has assured it that no major issues are anticipated with the plan and minor matters should be “satisfactorily resolved in due course”.

The company is targeting sanction of the project by year-end, subject to the requisite financing and regulatory approvals being secured, with first oil anticipated 3.5 years after sanction.

The break-even oil price for the project has been reduced to $45 a barrel on lower contractor pricing, while front-end engineering and design work is substantially completed.

Rockhopper chief executive Sam Moody said the recent awards of letters of intent and talks with the Falklands government represented “good progress in taking the steps required” towards project sanction.

The pair aim to exploit 220 million barrels at Sea Lion in PL032 under the first development phase using a floating production, storage and offloading vessel, with another 300 million barrels to be tapped in phase two from remaining reserves in the same licence as well as satellite deposits in PL004.

The overall Sea Lion complex in the North Falkland basin is estimated to hold gross recoverable contingent oil resources of 517 million barrels of oil out of an in-place estimate of 1.6 billion barrels.

Premier holds a 60% operating stake in the licence, which has been extended to May 2020, with Rockhopper on 40%.