Navitas expands activity in the Gulf of Mexico: acquires one-third of two oil and gas discoveries

Navitas Petroleum is expanding its operations in the Gulf of Mexico and, through its US subsidiary, is acquiring 33.33% of the rights to the Tiberius and Logan oil and gas discoveries from companies in the Kosmos and Occidental groups. The scope of the deal consists primarily of commitments to finance the future development of the discoveries, alongside cash payments and payments contingent on the project's progress.

The discoveries are located 20 km southeast of the Buckskin project, where Navitas has been producing oil for seven years. Production from Tiberius is expected to be carried out by connecting to the floating production platform also used by Buckskin, in a manner expected to shorten timelines and reduce development costs compared to building new infrastructure.

Tiberius is already in the development phase. The project partners received a Final Investment Decision (FID) this year for the first phase, which includes completing a previously drilled well. Production from the first well is expected to begin at the end of the third quarter of 2028. The development budget for this phase is estimated at $350 million, and Navitas' share is more than $115 million. Further drilling of another well and subsequently two more is planned as part of the reservoir's phased development. According to a report by Navitas to the stock exchange, existing agreements allow for the future increase of production capacity to approximately 30,000 barrels of oil per day and approximately 9 million cubic feet of natural gas per day.

Unlike Tiberius, the second discovery — Logan — is still at an earlier stage. The reservoir operator, American energy giant Occidental, has not yet made an investment decision, as this decision involves formulating development plans that are estimated to take several more years. The company estimates that the geographical proximity of the Logan and Tiberius discoveries and the identical ownership of the partners in both assets will allow for the future connection of Logan to the same production infrastructure, thereby reducing development costs.

The consideration structure in the deal is based primarily on Navitas' participation in financing the development. The company paid $4.6 million for its share of expenses incurred since the beginning of the year and will bear future development costs for Tiberius up to a cap of $68 million. This is Navitas' first collaboration with the two energy giants Kosmos and Occidental, which are considered to have many years of experience in developing gas and oil reservoirs in the Gulf of Mexico, as well as in other regions of the world. Such cooperation, in the opinion of Navitas' leaders, may open the door to joint deals and moves in the future.

Navitas, whose chairman is Gideon Tadmor, views the deal as the realization of a strategy focused on acquiring oil and gas discoveries that have already been identified but not yet developed, with the goal of advancing them to production while using existing infrastructure and in relatively short timeframes. Navitas stated that it intends to publish, along with the second-quarter reports of the year, the estimate of the reserves and resources of Tiberius and Logan, a figure expected to provide a more complete picture of the value of the acquired assets.