REG - Longboat Energy PLC - Audited Full Year Results to 31 December 2023
11/04/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240411:nRSK1134Ka&default-theme=true
RNS Number : 1134K Longboat Energy PLC 11 April 2024
Longboat Energy PLC
("Longboat Energy", the "Company" or "Longboat")
Audited Full Year Results to 31 December 2023 and Proposed Board Changes
London, 11 April 2024 - Longboat Energy, the full cycle emerging E&P
business, announces its results for the 12 months ended 31 December 2023.
Highlights
Corporate Activity
· Transformational transaction in Norway to form joint venture with
JAPEX (July 2023):
o Japan Petroleum Exploration Co., Ltd (JAPEX) acquired a 49.9% interest in
the Company's Norwegian subsidiary to create a new joint venture company
Longboat JAPEX Norge AS ("Longboat JAPEX")
o JAPEX made a total equity investment of US$20 million in two tranches,
US$16 million in 2023 and US$ 4million post the period end
o In addition, JAPEX has provided a five-year, US$100 million Acquisition
Finance Facility to finance acquisitions and associated development costs
· Acquired SE Asian management team and assets (September 2023):
o Longboat acquired Topaz Number One Limited, increasing its working
interest in the Production Sharing Contract over Block 2A offshore Sarawak,
Malaysia to 52.5% and simplifying the process to farm-down the high impact
exploration block ahead of a drilling commitment
o Topaz team of James Menzies and Pierre Eliet joined the Company bringing
extensive expertise and an established network in SE Asia
Operations Summary (including post-period events)
· First production acquisition of the Statfjord satellites, by
Longboat JAPEX, was completed (in January 2024):
o Demonstrates the ability of the Longboat JAPEX joint venture to access and
transact opportunities
o By end-March 2024, initial production of c. 300 boepd net to Longboat
JAPEX had doubled to c. 600, following the completion of drilling and gas-lift
installation on three of the five new Statfjord Øst wells brought on stream
since the acquisition
o The remaining two new wells require some minor work which is expected to
be completed in the coming months
o While the Statfjord satellites infill drilling project was successfully
executed technically, there have been delays, in both the development
programme and production ramp up, and cost overruns which together have had a
significant negative impact on the joint venture's projected working
capital. After the period end, Longboat JAPEX drew down US$17 million on the
Acquisition Finance Facility to fund the Statfjord satellites acquisition and
provide additional working capital
· Exploration well drilled in Norway on the Velocette prospect
(Longboat JAPEX 20%) discovered subcommercial quantities of gas.
· Kveikje Area:
o In a prolific area North West of the Troll field, Longboat JAPEX has
established a portfolio of assets including the Kveikje discovery and the
Kjøttkake/Lotus licence(awarded in January 2023)
o Kveikje, contains 3.5-6 million boe (2C-3C) net to Longboat JAPEX, the
operator Equinor is maturing plans for a multi-field cluster development
o Kjøttkake/Lotus has gross mean prospective resources of 27 mmboe with an
upside of 44 mmboe and a chance of success is 56% (Company APA application)
The well will be drilled using the semi-submersible Deepsea Yantai and is
expected to spud in Q3 2024
o In December, Longboat JAPEX announced a 2:1 farm down for a full carry on
the dry hole costs of Kjøttkake/Lotus, reducing its interest in the well to
15%, which completed in 2024
· The Company entered Malaysia in the Malaysian Bid Round 2022 by winning
operatorship of a Production Sharing Agreement for Block 2A (Longboat 36.75%
(subsequently increased to 52.5% following Topaz acquisition)):
o Exploration block offshore Sarawak in deep water covering an area of more
than 12,000 km2 with material exploration opportunities
o Low initial cost obligation and with up to three years until a drill
decision
Financial Summary
· Cash balance of £3.7 million as at 31 December 2023 (31 December
2022: £12.1 million) with no consolidated exploration finance facility (EFF)
borrowings due to the balances of Longboat JAPEX no longer forming part of the
consolidated balance sheet
· The continuing operations loss after taxation for the period,
excluding other comprehensive income, was £9.3 million (2022: £2.6 million),
with a profit on discontinued operations being £5.1 million (2022: loss of
12.9 million) resulting in a loss for the period of £4.2 million
Cost cutting
In light of and pending the successful execution of the Company's twin
jurisdiction M&A and operational strategy, there is limited ability to
make a material reduction in general and administrative expenditure in the
immediate future. However, the Company is mindful of the need to reduce
costs to the extent possible, and the Company is reviewing where savings can
be made
Board Rotation
Brent Cheshire and Jorunn Saetre have confirmed their intention to stand down
from the board as Non-Executive Directors and will not put themselves forward
for re-election at the forthcoming Annual General Meeting. Brent and Jorunn
have been with the Company since its inception and have provided strong
guidance and challenge at all times and will be very much missed. We thank
them for all of their hard work over the period. The Company has no immediate
plans to replace the Non-Executive Directors that are standing down
Outlook
· The Company's strategy remains unchanged, to build Longboat into a
full-cycle E&P company with Norway remaining the core area, with a focus
on SE Asia
· The Company is actively pursuing opportunities in Norway to deliver
material production volumes, primarily on a bilateral basis but is also
actively participating in sales proceeses. Longboat will make use of the
Acquisition Financing Facility provided by JAPEX which puts Longboat JAPEX in
a much stronger position in these processes
· The Lotus exploration well, where Longboat has a 15% retained and
fully carried interest, is expected to spud in Q3. The well will be targeting
analogous injectite sands to the sand encountered in Kveikje.
Helge Hammer, Chief Executive Officer of Longboat Energy, commented:
"In 2023, Longboat made a transformational transaction with JAPEX to create a
new joint venture in Norway. The JV is now in prime position to pursue
opportunities and deliver on our plans to grow production and reserves in high
quality assets in Norway.
Longboat also made further inroads into the Southeast Asian region, increasing
our working interest in Block2A in Malysia, and welcoming James Menzies and
Pierre Eliet to the team - both of whom have extensive experience and
established networks in the region.
Our strategy remains unchanged and in 2024, we seek to build cashflow
generating E&P portfolios in both Norway and Southeast Asia with the full
confidence that we will deliver considerable growth and create substantial
shareholder value."
The information contained within this announcement is considered to be inside
information prior to its release.
Footnotes:
Longboat Energy via FTI
Helge Hammer, Chief Executive Officer
Jon Cooper, Chief Financial Officer
Nick Ingrassia, Corporate Development Director
Stifel (Nomad and Joint Broker) Tel: +44 20 7710 7600
Callum Stewart
Jason Grossman
Ashton Clanfield
Cavendish Capital Markets Limited (Joint Broker)
Tel: +44 20 7397 8900
Neil McDonald
Pete Lynch
Leif Powis
FTI Consulting (PR adviser) Tel: +44 20 3727 1000
Ben Brewerton longboatenergy@fticonsulting.com (mailto:longboatenergy@fticonsulting.com)
Rosie Corbett
Catrin Trudgill
Results
For the period to 31 December 2023, the Group's loss after taxation from
continuing operations was £9.3 million.
Dividends
It is the Board's policy that the Company should seek to generate capital
growth for its shareholders but may recommend distributions at some future
date when the investment portfolio matures, and production revenues are
established and when it becomes commercially prudent to do so.
Statement of going concern
The Directors have completed the going concern assessment, taking into account
cash flow forecasts up to the end of 2025, sensitivities to those forecasts
and stress tests to assess whether the Group is a going concern. The base case
scenario includes the repayment of the Longboat JAPEX facility draw downs at
the end of 2024 and makes assumptions around the final development costs and
start up dates for the recently acquired Statfjord Satellites development
wells, including initial start up of the development wells in April 2024 and
the levels of business development activities and their chances of success.
Having undertaken careful enquiry, the Directors are of the view that the
Company and Group will need to access additional funds during 2024 in order to
fund on-going operations and pursue growth opportunities. This is in line with
the Company's current activities of exploring, maturing its discoveries and
seeking acquisitions.
The Group is forecast to have limited liquidity during H2 2024 under the base
case and will require additional funding. It is anticipated that funding will
be sourced through asset disposals, farm downs, the issue of new equity,
dilution in the Company's joint venture or a combination of all these actions.
To the extent that growth opportunities will support debt, this will be
considered where appropriate for example to support production acquisitions.
The financial statements for the period to 31 December 2023 have been prepared
assuming the Group will continue as a going concern. In support of this, the
Directors believe the liquid nature of asset market combined with historical
shareholder support, adequate funds can be accessed when required. However,
the ability to access such funding detailed above is not guaranteed at the
date of signing these financial statements. As a consequence, this funding
requirement represents a material uncertainty that may cast significant doubt
on the Group's ability to continue as a going concern. The financial
statements do not include any adjustments that would result from the basis of
preparation being inappropriate.
Outlook
Longboat now has two experienced M&A teams in place, one to pursue M&A
opportunities for Norway and one focused on South East Asia. Combined with our
in-house technical expertise, it puts the Company in a strong position to
deliver growth.
In Norway, we are focused on delivering a transaction to add material
production volumes to the relatively small initial production position we
acquired in January 2024 in the Statfjord Satellites. We will make use of the
Acquisition Financing Facility provided by JAPEX which will assist Longboat
JAPEX's participation in NCS sales processes.
In parallel with the M&A effort, work continues to progress the appraisal
and development plans for the discoveries we have in our portfolio,
particularly Kveikje, Oswig and Velocette, and to de-risk the exploration
licences. The objective is to achieve maximum value from the assets either by
developing them or by monetising the assets.
On Block 2A in Malaysia, we will finalise the evaluation of the giant Kertang
gas prospect before running a process to farm down and make the final drilling
decision. We have already been approached by a number of large E&P players
who are interested in this exciting exploration prospect. Following the
acquisition of privately held Topaz Number One Limited and the addition of
James Menzies and Pierre Eliet to the Longboat organisation, as announced 13
September, the Company now has a Business Development Team for SE Asia with a
proven track record, depth of knowledge and excellent relationships across the
region.
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2023
Notes 2023 2022
GROUP £ £
Other income 6 641,275 -
Administrative expenses (4,292,670) (2,660,798)
Operating loss 6 (3,651,395) (2,660,798)
Share of loss from equity accounted joint venture 15 (2,803,202) -
Impairment of equity accounted joint venture 15 (2,639,976) -
Finance costs 8 (51) (112)
Net foreign exchange (loss)/gain (364,366) 26,063
Investment income 5 155,397 42,374
Loss before taxation from continuing operations (9,303,593) (2,592,473)
Income tax 9 - -
Loss for the year from continuing operations (9,303,593) (2,592,473)
Profit/(loss) for the period from discontinued operations, net of tax 10 5,116,559 (12,880,134)
Loss for the period (4,187,034) (15,472,607)
Other comprehensive income / (expense)
Currency translation income from joint venture 349,929 -
Currency translation income on disposal of subsidiary 285,230 -
Currency translation expense on subsidiaries (885,598) (19,754)
Total items that may be reclassified to profit or loss (250,439) (19,754)
Total other comprehensive loss for the year (250,439) (19,754)
Total comprehensive loss for the year (4,437,473) (15,492,361)
Loss per share 11 Pence pence
Basic and diluted - continuing (16.42) (4.57)
Basic - discontinued 9.03 (22.73)
Diluted - discontinued 8.51 (22.73)
Statement of financial position
As at 31 December 2023
Notes 2023 2022
GROUP £ £
Investments in equity accounted joint venture 15 12,461,890 -
Exploration and evaluation assets 13 572,512 34,661,436
Property, plant and equipment 14 10,361 66,107
Trade and other receivables 17 - 98,368
Right of use asset 14 - 447,396
13,044,763 35,273,307
Current assets
Cash and cash equivalents 3,684,541 12,059,561
Inventories 16 - 123,432
Trade and other receivables 17 1,343,351 934,918
Current tax recoverable 18 - 40,755,157
5,027,892 53,873,068
Total assets 18,072,655 89,146,375
Current liabilities
Trade and other payables 19 894,237 5,225,497
Lease liabilities 20 - 122,612
Exploration Finance Facility bank borrowings 20 - 36,761,340
894,237 42,109,449
Net current assets 4,133,655 11,763,619
Non-current liabilities
Contingent consideration 12 239,688 -
Leases liabilities 20 - 366,968
Deferred tax liabilities 21 - 25,736,898
- 26,103,866
Total liabilities 1,133,925 68,213,315
Net assets 16,938,730 20,933,060
Equity
Called up share capital 24 5,710,812 5,666,665
Share premium account 25 35,605,370 35,570,411
Other reserves 450,000 450,000
Share option reserve 26 1,024,486 660,449
Currency translation reserve 27 310,803 561,242
Retained earnings (26,162,741) (21,975,707)
Total equity 16,938,730 20,933,060
The financial statements were approved by the board of directors and
authorised for issue on 10 April 2024 and are signed on its behalf by:
….................................
Helge Hammer
Chief Executive
Statement of changes in equity
As at 31 December 2023
Share Share Currency
Share Premium option translation Other Retained
Capital Account reserve reserve reserves earnings Total
Notes £ £ £ £ £ £ £
GROUP
Balance at 1 January 2022 5,666,665 35,570,411 353,550 580,996 450,000 (6,503,100) 36,118,522
Year ended 31 December 2022
Loss for the year - - - - - (15,472,607) (15,472,607)
Other comprehensive expense - - - (19,754) - (19,754)
Credit to equity for equity settled
share-based payments - - 306,899 - - - 306,899
Balance at 31 December 2022 5,666,665 35,570,411 660,449 561,242 450,000 (21,975,707) 20,933,060
Year ended 31 December 2023
Loss for the year - - - - - (4,187,034) (4,187,034)
Other comprehensive income on joint venture - - - 349,929 - - 349,929
Other comprehensive income on disposal of subsidiary 285,230 285,230
Other comprehensive expense on subsidiaries (885,598) (885,598)
Credit to equity for equity settled
share-based payments - - 364,037 - - - 364,037
Issue of share capital 44,147 34,959 - - - - 79,106
Balance at 31 December 2023 5,710,812 35,605,370 1,024,486 310,803 450,000 (26,162,741) 16,938,730
Consolidated statement of cash flows
for the Year ended 31 December 2023
2023 2022
Notes £ £ £ £
GROUP
Cash flow from operating activities
Cash absorbed by continuing operations 31 (3,953,732) (2,616,492)
Cash absorbed by operating activities from discontinued operations 32 (2,663,342) (4,957,680)
Net cash outflow from operating
Activities (6,617,074) (7,574,172)
Investing activities
Purchase of property, plant and equipment (12,007) (4,998)
Purchase of exploration and evaluation assets (148,906) -
Interest received 155,397 42,486
Repayment of loan from Longboat JAPEX to Longboat plc 3,710,329 -
Investing activities from discontinued operations (5,655,406) (43,116,021)
Cash removed from Group on disposal (1,693,429) -
Net cash used in
investing activities (3,644,022) (43,078,533)
Financing activities
Loan drawdowns
Interest paid (51) (112)
Financing activities from discontinued operations 2,027,204 35,179,319
Net cash generated from
financing activities 2,027,153 35,179,207
Net decrease in cash and
cash equivalents (8,233,943) (15,473,498)
Cash and cash equivalents at beginning
of year 12,059,562 26,282,067
Foreign exchange (141,078) 1,250,992
Cash and cash equivalents at end of year 3,684,541 12,059,561
Relating to:
Bank balances and short term deposits 3,684,541 12,059,561
Notes to the financial statements
1. Accounting policies
Company information
Longboat Energy plc is a public quoted company, limited by shares,
incorporated in England and Wales. The registered office is 5th Floor One New
Change, London, EC4M 9AF.
1.1 Accounting convention
The financial statements have been prepared in accordance with UK adopted
international accounting standards and with those parts of the Companies Act
2006 applicable to companies reporting under IFRS, except as otherwise
stated. As ultimate parent of the Group, the Company has taken advantage of
Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101), which
addresses the financial reporting requirements and disclosure exemptions in
the individual financial statements of "qualifying entities", that otherwise
apply the recognition, measurement and disclosure requirements of UK adopted
international accounting standards.
The disclosure exemption adopted by the Company in accordance with FRS 101
are:
· the requirements under IAS 7 to present a cash flow
statement
The financial statements are prepared in sterling, which is the functional
currency of the Group. Monetary amounts in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost
convention. The principal accounting policies adopted are set out below.
1.2 Foreign currencies
The functional currency for the UK entities is sterling with the US dollar
being the functional currency for Longboat Energy (SE Asia) Sdn.Bhd, and the
Malaysian branches of Topaz Number One Limited and Longboat Energy (2A)
Limited. Longboat JAPEX Norge AS (formerly Longboat Energy Norge AS) has a
functional currency of Norwegian kroner.
Transactions in foreign currencies during the year are recorded in the
functional currency at the rate of exchange ruling at the date of the
transaction. Monetary assets and liabilities are translated at the rate ruling
on the Balance Sheet date and any gains and losses on translation are
reflected in the Income Statement.
The assets and liabilities of foreign operations are translated into sterling
at the rate of exchange ruling at the Balance Sheet date. Income and expenses
are translated at the rate of exchange ruling at the date of the
transaction. The resulting exchange differences on assets and liabilities of
such foreign operations are taken directly to a separate component of equity.
On disposal of a foreign entity, the deferred cumulative amount recognised in
equity relating to that particular foreign operation is recognised in the
Income Statement.
1.3 Joint arrangements
Judgement is required to determine when the Group has joint control over an
arrangement, which requires an assessment of the relevant activities and when
the decisions in relation to those activities require unanimous consent. The
Group has determined that the relevant activities for its joint arrangements
are those relating to the operating and capital decisions of the arrangement,
including the approval of the annual capital and operating expenditure work
programme and budget for the joint arrangement, and the approval of chosen
service providers for any major capital expenditure as required by the joint
operating agreements applicable to the entity's joint arrangements. The
considerations made in determining joint control are similar to those
necessary to determine control over subsidiaries, as set out in Note 2.
Judgement is also required to classify a joint arrangement. Classifying the
arrangement requires the Group to assess their rights and obligations arising
from the arrangement. Specifically, the Group considers:
· the structure of the joint arrangement; whether it is
structured through a separate vehicle;
· when the arrangement is structured through a separate
vehicle, the Group also considers the rights and obligations arising
therefrom:
· the legal form of the separate vehicle; the terms of
the contractual arrangement, or other facts and circumstances, considered on a
case by case basis.
1.3 Joint arrangements (continued)
This assessment often requires significant judgement. A different conclusion
about both joint control and whether the arrangement is a joint operation or a
joint venture, may materially impact the accounting.
A Joint Operation is a type of joint arrangement whereby the parties that have
joint control of the arrangement have rights to the assets and obligations for
the liabilities, relating to the arrangements.
In relation to its interests in joint operations, the Group recognises its:
· assets, including its share of any assets held jointly;
· liabilities, including its share of any liabilities
incurred jointly;
· revenue from the sale of its share of the output
arising from the joint operation;
· share of the revenue from the sale of the output by the
joint operation; and
· expenses, including its share of any expenses incurred
jointly.
1.4 Going concern
The Directors have completed the going concern assessment, taking into account
cash flow forecasts up to the end of 2025, sensitivities to those forecasts
and stress tests to assess whether the Group is a going concern. The base case
scenario includes the repayment of the Longboat JAPEX facility draw downs at
the end of 2024 and makes assumptions around the final development costs and
start up dates for the recently acquired Statfjord Satellites development
wells, including initial start up of the development wells in April 2024 and
the levels of business development activities and their chances of success.
Having undertaken careful enquiry, the Directors are of the view that Longboat
Energy plc and Longboat JAPEX Norge will need to access additional funds
during 2024 in order to fund on-going operations and pursue growth
opportunities. This is in line with the Company's current activities of
exploring, maturing its discoveries and seeking acquisitions.
The Group is forecast to have limited liquidity during H2 2024 under the base
case and will require additional funding. It is anticipated that funding will
be sourced through asset disposals, farm downs, the issue of new equity,
dilution in the Longboat JAPEX Norge subsidiary or a combination of all these
actions.
To the extent that growth opportunities will support debt, this will be
considered where appropriate for example to support production acquisitions.
The financial statements for the period to 31 December 2023 have been prepared
assuming the Group will continue as a going concern. In support of this, the
Directors believe the liquid nature of asset market combined with historical
shareholder support, adequate funds can be accessed when required. However,
the ability to access such funding detailed above is not guaranteed at the
date of signing these financial statements. As a consequence, this funding
requirement represents a material uncertainty that may cast significant doubt
on the Group's ability to continue as a going concern. The financial
statements do not include any adjustments that would result from the basis of
preparation being inappropriate.
1.5 Medium term sustainability
In the medium term, new acquisitions and developments resulting from
exploration success will require further equity capital and new debt
facilities. In any of these circumstances the Company will require additional
financing from the equity markets and the bank or credit markets. Availability
of such financing is subject not only to market conditions but also a
continued willingness of investors to finance oil and gas companies.
1.6 Oil and Gas Assets
Capitalisation
Pre-acquisition costs on oil and gas assets are recognised in the Income
Statement when incurred. Costs incurred after rights to explore have been
obtained, such as geological and geophysical surveys, drilling and commercial
appraisal costs and other directly attributable costs of exploration and
appraisal including technical and administrative costs are capitalised as
intangible exploration and evaluation ("E&E") assets. The assessment of
what constitutes an individual E&E asset is based on technical criteria
but essentially either a single licence area or contiguous licence areas with
consistent geological features are designated as individual E&E assets.
1.6 Oil and Gas Assets (continued)
E&E costs are not amortised prior to the conclusion of appraisal
activities. Once active exploration is completed the asset is assessed for
impairment. If commercial reserves are discovered then the carrying value of
the E&E asset is reclassified as a development and production ("D&P")
asset, following development sanction, but only after the carrying value is
assessed for impairment and where appropriate the carrying value adjusted. If
commercial reserves are not discovered the E&E asset is written off to the
Income Statement.
Oil and gas assets include rights in respect of unproved properties. Property,
plant and equipment, including expenditure on major inspections, and
intangible assets are initially recognised in the Balance Sheet at cost where
it is probable that they will generate future economic benefits. This includes
capitalisation of decommissioning and restoration costs associated with
provisions for asset retirement.
Property, plant and equipment and intangible assets are subsequently carried
at cost less accumulated depreciation, depletion and amortisation (including
any impairment). Gains and losses on disposals are determined by comparing the
proceeds with the carrying amounts of assets sold and are recognised in
income, within interest and other income.
1.7 Licence and Property Acquisition Costs
Exploration licence costs are capitalised in intangible assets. Licence and
property acquisition costs are reviewed at each reporting date to confirm that
there is no indication that the carrying amount exceeds the recoverable
amount. This review includes confirming that exploration drilling is still
under way or firmly planned, or that work is under way to determine that the
discovery is economically viable. If no future activity is planned or the
licence has been relinquished or has expired, the carrying value of the
licence and property acquisition costs are written off through the statement
of profit or loss and other comprehensive income. Upon recognition of proved
reserves and internal approval for development, the relevant expenditure is
transferred to oil and gas properties.
1.8 Development Costs
Expenditure on the construction, installation or completion of infrastructure
facilities such as platforms, pipelines and the drilling of development wells
is capitalised within property, plant and equipment.
1.9 Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently
measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets
less their residual values over their useful lives on the following bases:
Fixtures and fittings 20% straight
line
Computers
33.33% straight line
The gain or loss arising on the disposal of an asset is determined as the
difference between the sale proceeds and the carrying value of the asset, and
is recognised in the income statement.
1.10 Non-current investments in subsidiaries and joint ventures
A subsidiary is an entity controlled by the company. Control is the power to
govern the financial and operating policies of the entity so as to obtain
benefits from its activities. The subsidiaries of the Company are held at
cost.
A joint venture is a joint arrangement whereby the parties that have joint
control of the joint venture have rights to the net assets of the joint
venture. The Group accounts for a joint venture using the equity method, where
the investment in the joint venture is recognised at cost, and the carrying
amount is increased or decreased to recognise the Group's share of the profit
or loss of the investee after the date of acquisition. Transactions between
the Group and the joint venture that relate to shared services are recognised
in other income or expense as incurred, and are disclosed in the related party
transactions.
1.11 Impairment of non-current assets
At each reporting end date, the company reviews the carrying amounts of its
non-current assets to determine whether there is any indication that those
assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where it is not possible to estimate the
recoverable amount of an individual asset, the company estimates the
recoverable amount of the cash-generating unit to which the asset belongs. Any
evidence on the performance of the assets received following the end of the
period, which could not have been established during the current period will
be recognised in a subsequent period rather than in the current period.
Recoverable amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated
to be less than the carrying amount, then the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised immediately in profit or loss, unless the relevant asset is
carried at a revalued amount, in which case the impairment loss is treated as
a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (or cash-generating unit) is increased to the revised estimate of the
recoverable amount, capped such that the increased carrying amount does not
exceed the carrying amount that would have been determined had no impairment
loss been recognised for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognised immediately in profit or loss,
unless the relevant asset is carried at a revalued amount, in which case the
reversal of the impairment loss is treated as a revaluation increase.
Impairment of intangible assets is assessed when facts and circumstances
suggest that the carrying amount of an exploration and evaluation asset may
exceed its recoverable amount. The facts and circumstances used are in
accordance with those dictated by IFRS 6 and if any of those circumstances are
present then an impairment test is performed in accordance with IAS 36 and any
loss recognised. An exploratory well in progress at period end which is
determined to be unsuccessful subsequent to the balance sheet date based on
substantive evidence obtained during the drilling process in that subsequent
period is treated as a non-adjusting subsequent event.
1.12 Inventories
Materials and supplies inventories are valued at the lower of cost or net
realisable value. The cost of materials is the purchase cost, determined on a
first-in, first-out basis.
1.13 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with
banks, and other short-term liquid investments with original maturities of
three months or less.
1.14 Financial assets
Financial assets are recognised in the company's statement of financial
position when the company becomes party to the contractual provisions of the
instrument. Financial assets are classified into specified categories,
depending on the nature and purpose of the financial assets.
At initial recognition, financial assets classified as fair value through
profit and loss are measured at fair value and any transaction costs are
recognised in profit or loss. Financial assets not classified as fair value
through profit and loss are initially measured at fair value plus transaction
costs.
Financial assets at fair value through profit or loss
When any of the above-mentioned conditions for classification of financial
assets is not met, a financial asset is classified as measured at fair value
through profit or loss. Financial assets measured at fair value through profit
or loss are recognised initially at fair value and any transaction costs are
recognised in profit or loss when incurred. A gain or loss on a financial
asset measured at fair value through profit or loss is recognised in profit or
loss and is included within finance income or finance costs in the statement
of income for the reporting period in which it arises.
1.14 Financial assets (continued)
Financial assets held at amortised cost
Financial instruments are classified as financial assets measured at amortised
cost where the objective is to hold these assets in order to collect
contractual cash flows, and the contractual cash flows are solely payments of
principal and interest. They arise principally from the provision of goods and
services to customers (eg trade receivables). They are initially recognised at
fair value plus transaction costs directly attributable to their acquisition
or issue, and are subsequently carried at amortised cost using the effective
interest rate method, less provision for impairment where necessary.
Financial assets at fair value through other comprehensive income
The Company has made an irrevocable election to recognise changes in fair
value of investments in equity instruments through other comprehensive income,
not through profit or loss. A gain or loss from fair value changes will be
shown in other comprehensive income and will not be reclassified subsequently
to profit or loss. Equity instruments measured at fair value through other
comprehensive income are recognised initially at fair value plus transaction
cost directly attributable to the asset. After initial recognition, each asset
is measured at fair value, with changes in fair value included in other
comprehensive income. Accumulated gains or losses recognised through other
comprehensive income are directly transferred to retained earnings when an
equity instrument is derecognised or its fair value substantially decreased.
Dividends are recognised as finance income in profit or loss.
Impairment of financial assets
Financial assets, other than those measured at fair value through profit or
loss, are assessed for impairment at each reporting end date.
For trade receivables, joint venture and intercompany receivables, the Company
applies a simplified approach in calculating ECLs. Therefore, the Company does
not track changes in credit risk, but instead recognises a loss allowance
based on lifetime ECLs at each reporting date. Due to the nature of the
balances the Company has determined that a provisions matrix is not
appropriate and applies a scenario based approach to estimate lifetime ECL.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash
flows from the asset expire, or when it transfers the financial asset and
substantially all the risks and rewards of ownership to another entity.
1.15 Financial liabilities
The Company recognises financial debt when the Company becomes a party to the
contractual provisions of the instruments. Financial liabilities are
classified as either financial liabilities at fair value through profit or
loss or other financial liabilities.
Financial liabilities at fair value through profit or loss
Financial liabilities are classified as measured at fair value through profit
or loss when the financial liability is held for trading. A financial
liability is classified as held for trading if:
· it has been incurred principally for the purpose of
selling or repurchasing it in the near term, or
· on initial recognition it is part of a portfolio of
identified financial instruments that the Company manages together and has a
recent actual pattern of short-term profit taking, or
· it is a derivative that is not a financial guarantee
contract or a designated and effective hedging instrument.
Financial liabilities at fair value through profit or loss are stated at fair
value with any gains or losses arising on remeasurement recognised in profit
or loss.
Other financial liabilities
Other financial liabilities, including borrowings, trade payables and other
short-term monetary liabilities, are initially measured at fair value net of
transaction costs directly attributable to the issuance of the financial
liability. They are subsequently measured at amortised cost using the
effective interest method. For the purposes of each financial liability,
interest expense includes initial transaction costs and any premium payable on
redemption, as well as any interest or coupon payable while the liability is
outstanding.
1.15 Financial liabilities (continued)
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the Company's
obligations are discharged, cancelled, or they expire.
1.16 Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
Company's liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the reporting end date.
In 2022 the Group benefited from tax legislation in Norway which allows tax to
be reclaimed on specific exploration activity. This allowed the Group to
recognise a tax receivable. For 2023 the Norwegian entity has been
deconsolidated and therefore this receivable is no longer recognised in the
Group.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit and is accounted for using the balance sheet liability method. Deferred
tax liabilities are recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not recognised if
the temporary difference arises from goodwill or from the initial recognition
of other assets and liabilities in a transaction that affects neither the tax
profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered. Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is realised.
Deferred tax is charged or credited in the income statement, except when it
relates to items charged or credited directly to equity, in which case the
deferred tax is also dealt with in equity. Deferred tax assets and liabilities
are offset when the Company has a legally enforceable right to offset current
tax assets and liabilities and the deferred tax assets and liabilities relate
to taxes levied by the same tax authority.
1.17 Employee benefits
The costs of short-term employee benefits are recognised as a liability and an
expense, unless those costs are required to be recognised as part of the cost
of inventories or non-current assets.
The cost of any unused holiday entitlement is recognised in the period in
which the employee's services are received.
Termination benefits are recognised immediately as an expense when the Company
is demonstrably committed to terminate the employment of an employee or to
provide termination benefits.
1.18 Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an
expense as they fall due.
1.19 Leases
The right-of-use asset is initially measured at cost, which comprises the
initial amount of the lease liability adjusted for any lease payments made at
or before the commencement date plus any initial direct costs and an estimate
of the cost of obligations to dismantle, remove, refurbish or restore the
underlying asset and the site on which it is located, less any lease
incentives received.
The right-of-use asset is subsequently depreciated using the straight-line
method from the commencement date to the earlier of the end of the useful life
of the right-of-use asset or the end of the lease term. The estimated useful
lives of right-of-use assets are determined on the same basis as those of
other property, plant and equipment. The right-of-use asset is periodically
reduced by impairment losses, if any, and adjusted for certain remeasurements
of the lease liability.
1.19 Leases (continued)
The lease liability is initially measured at the present value of the lease
payments that are unpaid at the commencement date, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily
determined, the Company's incremental borrowing rate. Lease payments included
in the measurement of the lease liability comprise fixed payments, variable
lease payments that depend on an index or a rate, amounts expected to be
payable under a residual value guarantee, and the cost of any options that the
Company is reasonably certain to exercise, such as the exercise price under a
purchase option, lease payments in an optional renewal period, or penalties
for early termination of a lease.
The lease liability is measured at amortised cost using the effective interest
method. It is remeasured when there is a change in: future lease payments
arising from a change in an index or rate; the Company's estimate of the
amount expected to be payable under a residual value guarantee; or the
Company's assessment of whether it will exercise a purchase, extension or
termination option. When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying amount of the right-of-use
asset or is recorded in profit or loss if the carrying amount of the
right-of-use asset has been reduced to zero.
All leases are accounted for by recognising a right-of-use asset and a lease
liability except for:
· Leases of low value assets; and
· Leases with a duration of 12 months or less.
1.20 Reserves
Share capital
Share capital represents the nominal value of shares issued less the nominal
value of shares repurchased and cancelled.
Share premium
This reserve represents the difference between the issue price and the nominal
value of shares at the date of issue, net of related issue costs and share
premium cancelled.
Share based payment reserve
This reserve represents the potential liability for outstanding equity settled
share options.
Retained earnings
Net revenue profits and losses of the Group which are revenue in nature are
dealt with in this reserve.
Currency translation reserve
This reserve represents foreign exchange differences on the revaluation of the
foreign subsidiary.
Other reserves
Other reserves relate to the nominal value of share capital repurchased and
cancelled.
1.21 Share based payments
Employees (including senior executives) of the Group receive remuneration in
the form of share-based payment transactions which are equity settled. The
cost of equity-settled transactions with employees is measured by reference to
the fair value at the date on which they are granted. The fair value is
determined by an external valuer using an appropriate pricing model.
The cost of equity-settled transactions is recognised, together with a
corresponding increase in equity, over the period in which the performance
and/or service conditions are fulfilled, ending on the date on which the
relevant employees become fully entitled to the award (the "vesting date").
The cumulative expense recognised for equity-settled transactions at each
reporting date until the vesting date reflects the extent to which the vesting
period has expired and the Group's best estimate of the number of equity
instruments that will ultimately vest. The Income Statement charge or credit
for a period represents the movement in cumulative expense recognised as at
the beginning and end of that period.
1.21 Share based payments (continued)
The key areas of estimation regarding share based payments are share price
volatility; and estimated lapse rates.
No adjustments are made in respect of market conditions not being met,
neither the number of instruments nor the grant-date fair value is adjusted
if the outcome of the market condition differs from the initial estimate.
Where the terms of an equity-settled award are modified, the minimum expense
recognised is the expense as if the terms had not been modified. An additional
expense is recognised for any modification, which increases the total fair
value of the share based payment arrangement, or is otherwise beneficial to
the employee as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested
on the date of cancellation, and any expense not yet recognised for the award
is recognised immediately. However, if a new award is substituted for the
cancelled award, and designated as a replacement award on the date that it is
granted, the cancelled and new awards are treated as if they were a
modification of the original award, as described in the previous paragraph.
The dilutive effect of outstanding options is reflected as additional share
dilution in the computation of earnings per share.
1.22 Discontinued operations
In accordance with IFRS 5 "Non-current assets held for sale and discontinued
operations" the net results relating to the disposal group are presented
within discontinued operations in the income statement, for which the
comparatives have been restated. Please refer to note 10 for further
details.
1.23 Profit on disposal
In accordance with IFRS 10, in an event where the Company holding in an
investment is diluted the holding will be assessed to establish if loss of
control has occurred.
In the event that loss of control is confirmed, the assets and liabilities of
the subsidiary will be derecognised. The fair value of the consideration
received in exchange for the loss of control will be recognised, in addition
to the fair value of the investment retained. Any other comprehensive income
in relation to the former subsidiary will be reclassified to the profit and
loss. Any difference in the entries above will be recognised as a gain or
loss in the current year income statement.
1.24 Acquisitions
Acquisitions are assessed to determine whether they meet the criteria of a
business combination or an asset purchase.
The Company determines that it has acquired a business when the acquired set
of activities and assets include an integrated set of activities and assets
that is capable of being conducted and managed for the purpose of providing
goods or services to customers, generating investment income (such as
dividends or interest) or generating other income from ordinary activities.
When the Company acquires a business, it assesses the financial assets and
liabilities assumed for appropriate classification and designation in
accordance with the contractual terms, economic circumstances and pertinent
conditions as at the acquisition date. Business combinations are accounted for
using the acquisition method under IFRS 3. The cost of an acquisition is
measured at fair value, which shall be calculated as the sum of the
acquisition ‑date fair values of the assets transferred by the acquirer, the
liabilities incurred by the acquirer to former owners of the acquiree and the
equity interests issued by the acquirer. For each business combination, the
Company elects whether to measure the non-controlling interests in the
acquiree at fair value or at the proportionate share of the acquiree's
identifiable net assets. Acquisition-related costs are expensed as incurred
and included in administrative expenses.
1.24 Acquisitions (continued)
Certain acquisitions can be treated as an asset acquisition under IFRS 3, even
when the definition of a business is met. This is referred to as the
'concentration test' and allows for an acquisition to be treated as an asset
acquisition.
In circumstances where this test is passed, and the Company consider this
accounting approach to be most appropriate, the Company will treat the
acquisition as an asset acquisition rather than a business combination. In
this case, all assets and liabilities purchased are allocated a fair value and
the core asset purchased is designated the remaining allocation of the fair
value of the consideration. No good will or bargain purchase is recognised.
2 Adoption of new and revised standards and changes in
accounting policies
In the current year, the following new and revised Standards and
Interpretations have been adopted by the company. None of these new and
revised Standards and Interpretations had an effect on the current period or a
prior period but may have an effect on future periods:
Effective from:
IFRS 17 Insurance contracts 1 January 2023
IAS 1 and IFRS Practice Statement 2 (Amendments) Disclosure of accounting policies 1 January 2023
IAS 8 (Amendments) Definition of accounting estimates 1 January 2023
IAS 12 (Amendments) Deferred tax related to assets and liabilities arising from a single 1 January 2023
transaction
Standards which are in issue but not yet effective
At the date of authorisation of these financial statements, the following
Standards and Interpretations, which have not yet been applied in these
financial statements, were in issue but not yet effective:
Effective from:
IFRS 16 (Amendment) Liability in a Sale and Leaseback 1 January 2024
IAS 1 (Amendment) Classification of liabilities as current or non-current - deferral of 1 January 2024
effective date
IAS 1 (Amendment) Non-current Liabilities with covenants 1 January 2024
IAS 7 (Amendment) Supplier Finance Arrangements 1 January 2024
IAS 21 (Amendment) Lack of Exchangeability 1 January 2025
The Directors do not expect that the adoption of the Standards listed above
will have a material impact on the financial statements of the Company.
The Company plans to adopt the above standards when from the effective dates
noted in the table above.
3 Critical accounting estimates and judgements
In the application of the Group's accounting policies, the directors are
required to make judgements, estimates and assumptions about the carrying
amount of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual
results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised, if the revision affects only that period, or in the
period of the revision and future periods if the revision affects both current
and future periods.
The estimates and assumptions which have a significant risk of causing a
material adjustment to the carrying amount of assets and liabilities are
outlined below.
Exploration and evaluation assets (notes 10, 13, 15)
Prior to the derecognition of the assets of Longboat JAPEX Norge, judgement
was required to determine whether impairment indicators exist in respect of
the Group's exploration assets, formerly recognised in the statement of
financial position. The Group has to take into consideration whether the
assets have suffered any impairment, taking into consideration licence status,
planned expenditures, the results of the drilling to date, and the likelihood
of reserves being found. The Group evaluates information from third parties in
making these assessments, where available and the judgments can be subject to
change, if future information becomes available. As at 14 July 2023 the Group
determined that impairment of £10.4 million (2022: £42.9 million) relating
to Egyptian Vulture, was required in respect of the exploration licences
detailed in note 10 and 13.
Following the set-up of the joint venture, this assessment occurs at company
level in Longboat JAPEX Norge, and any impairment expense recognised is
evaluated by the Group and recognised via the equity accounted profit/loss for
the period. For 2023 the Group took a 50.1% share of the write off of
Velocette (100% write off of £17.2 million), see note 15 for more details.
Share-based payments (note 26)
Estimation is required in determining inputs to the share-based payment
calculations.
The fair value of the options were determined by an external valuation
provider using an industry accepted pricing model.
Impairment of investments in subsidiaries and joint ventures (note 15)
Investments in subsidiaries and joint ventures have been assessed for
recoverability based on the current value of the investments. Determination is
based upon the assessment of exploration risk, net asset position and cash
within the underlying entity. See note 15 for further details on the
investments.
Expected credit loss (note 17)
Analysis, which considers both historical and forward looking qualitative and
quantitative information is performed by Management to determine whether the
credit risk has significantly increased since the time the receivable was
initially recognised. . Management considers the expected credit losses (ECL)
for the current receivables balances at Group level to be minimal, in view
that these companies have no history of default and payment is made in a short
period. ECL for intercompany receivables at Company level has been assessed
and an entry has been booked, donating a write down of 50% of the underlying
balance with the subsidiary, Longboat Energy 2A limited, to reflect the
uncertainty around cash flows.
Fair value of equity accounting for joint venture (note 10)
On initial loss of control of Longboat Energy Norge AS an estimate was made
over the possible future cash flows from the contingent receivables noted in
the investment agreement. As some of the consideration was based on the
completion of an acquisition deal and a successful exploration drilling
project a weighted risk model was used to calculate the fair values of the
future receivables. These estimates were then discounted using an estimated
discount rate to establish the current value of the contingent receivable for
recognition.
3 Critical accounting estimates and judgements (continued)
Acquisition of Topaz Number One Limited and fair value of contingent
consideration payable (note 12)
The acquisition of Topaz Number One Limited required judgment to determine
whether the transaction represented an asset acquisition or a business
combination. In forming the conclusion that the acquisition represented an
asset purchase management considered factors including the nature and stage of
exploration of the underlying licences and the extent of inputs and processes
necessary to generate outputs existed and concluded that the transaction
represented an asset purchase. Estimate and judgment was applied in fair
valuing the contingent portion of the consideration. Management applied
judgement in determining the likelihood of all possible scenarios and this was
modelled into a weighted fair value calculation, which was discounted, using
an estimated discount rate, to establish the current value of the contingent
payable to recognise.
4 Employees
GROUP
The average monthly number of persons (including directors) employed by the
group and company during the year was:
2023 2022
Group Number Number
Executive Directors 3 3
Non-executive Directors 5 5
Staff 14 10
Total 22 18
2023 2022
Company Number Number
Executive Directors 3 3
Non-executive Directors 5 5
Staff 1 10
Total 9 18
Their aggregate remuneration comprised:
2023 2022
£ £
Wages and salaries 1,465,734 1,148,099
Social security costs 161,374 160,616
Pension costs 58,250 55,000
Share based payment charge 199,017 157,757
Remuneration - continuing operations 1,884,375 1,521,472
Remuneration - discontinued operations 1,056,238 2,200,289
4 Employees (continued)
Discontinued operations relate to Longboat Energy Norge AS up to 14 July 2023,
whereafter the Group's share (50.1%) of the results of renamed Longboat JAPEX
Norge AS are recognised as a part of the loss on equity accounted joint
venture investment, see note 15 for more details.
Foreign currency gains arise on remuneration due to one of the executive
director's salaries being declared in GBP and paid in NOK.
The remuneration of the highest paid director is shown below.
Taxable Annual
Salary Benefits Bonus Pension Total
Helge Hammer 320,421 1,362 - 24,706 346,489
5 Investment income
GROUP 2023 2022
£ £
Interest income
Bank deposits 155,397 42,374
6 Operating loss from continuing operations
GROUP 2023 2022
£ £
Operating loss for the year is stated after charging/(crediting):
Exchange (gain)/loss 365,013 (26,063)
Fees payable to the company's auditors for the audit of the parent
company and consolidated financial statements 95,200 65,000
Fees payable to the company's auditors for the audit of the subsidiary 22,000 18,304
financial statements
Fees payable to the company's auditors for non audit services 42,000 23,000
Depreciation of property, plant and equipment 10,479 10,300
Share-based payments 199,017 157,756
Executive director's remuneration 790,191 616,000
Non-executive director remuneration 334,102 296,750
Wages and salaries 378,470 320,904
Pensions and payroll taxes 265,550 215,616
New Ventures and Business Development 350,975 42,500
Professional fees 446,207 363,356
Fixed rate manpower charges from Longboat JAPEX 302,974 -
Contractor day rates 233,885 91,917
Legal fees 232,920 14,387
Accountancy fees 157,835 119,386
Other income relates to £543,930 of fixed fee related to manpower, charged
from the Company to Longboat JAPEX from 15 July 2023. The remaining £97,344
relates to management service recharges from the Company to Longboat JAPEX.
7 Auditor's remuneration
2023 2022
GROUP £ £
Fees payable to the company's auditor and associates:
For audit services
Audit of the parent company and consolidated financial statements 95,200 65,000
Audit of subsidiary financial statements 22,000 18,304
During the year the auditor provided non-audit services in relation to an
interim review of £42,000 (2022: £23,000).
8 Finance costs
2023 2022
GROUP £ £
Interest on HMRC payments 51 112
51 112
9 Income tax (credit)/expense
2023 2022
GROUP £ £
Current tax (credit)
UK corporation tax on profits for the current period - -
Deferred tax
UK deferred taxation - -
Total tax (credit) - -
The charge for the year can be reconciled to the loss per the income statement
as follows:
2023 2022
£ £
Loss before taxation (9,303,593) (15,472,607)
Expect tax credit based on a corporation tax rate of 23.52%
(2022: 19.00%) (2,188,255) (2,939,795)
Effect of expenses not deductible in determining taxable profit 1,453,408 2,577,652
Remeasurement of deferred tax for changes in tax rate (45,351)
Movement in Deferred tax not recognised 780,198 362,428
Fixed asset differences - (285)
Taxation credit for the year - -
Unused tax losses in the UK on which no deferred tax asset has been recognised
as at 31 December 2023 was £7,914,426 (2022: £4,783,533) and the potential
tax benefit was £1,976,015 (2022: £1,195,884, updated by £832,820 to
reflect the effect of a change to the tax rate). Deferred tax assets,
including those arising from temporary differences, are recognised only when
it is considered more likely than not that they will be recovered, which is
dependent on the generation of future assessable income of a nature and of an
amount sufficient to enable the benefits to be utilised.
10 Gain / (loss) for period from discontinued operations
On 14 July 2023 Longboat Energy Norge ("Longboat Norge") issued new shares,
representing 49.9% of its total enlarged issued share capital, to Japan
Petroleum Exploration Co ("JAPEX"). This share issue resulted in Longboat
Energy plc losing its controlling interest in Longboat Norge and created a new
joint venture investment with JAPEX, where the Company and Japex hold equal
voting rights over Norge, which was renamed Longboat JAPEX Norge AS ("Longboat
JAPEX"). Under the terms of the shareholder agreement the joint venture
partners have equal board representation and joint approvals are required for
reserved matters which represent the relevant strategic decision making of the
company.
As this transaction resulted in joint control, the assets and liabilities of
Longboat JAPEX ceased to be consolidated by the Group following loss of
control. The results of the entity are shown as discontinued operations up to
14 July 2023, whereafter the Group's share (50.1%) of the results of Longboat
JAPEX are recognised as a share of loss on the equity accounted joint venture
investment, see note 15 for more details.
31 Dec 31 Dec
2023 2022
£ £
Expenses excluding exploration write offs* (4,332,660) (3,918,853)
Exploration write off (10,427,155) (42,877,022)
Loss before tax (14,759,815) (46,795,875)
Current tax on discontinued operations 2,579,938 41,029,956
Deferred tax on discontinued operations 6,831,888 (7,114,215)
Loss after tax on discontinued operations (5,347,989) (12,880,134)
Gain on disposal** 10,464,548 -
Gain / (loss) after tax including gain on disposal 5,116,559 (12,880,134)
Gain / (loss) per share impact from discontinued operations (note 11):
operations
Basic 9.03 (22.73)
Diluted 8.51 (22.73)
*Balance includes £285,230 of historic currency translation adjustments,
previously held in the currency translation reserves, that were taken to the
profit and loss account as unrealized foreign exchange loss on the disposal of
Longboat JAPEX.
**Gain on disposal
Fair value of Joint Venture of Longboat JAPEX Norge AS** 17,555,140
Net assets at date of loss of control (7,090,592)
Gain on loss of control 10,464,548
** At the date of disposal the fair value of the joint venture was calculated
based on the fair value of the consideration received. There are three
tranches to the investment consideration.
Base consideration: Due on completion and was set at USD 16 million
equivalent to 3,386,430 new shares at 1 NOK each in Longboat Norge at the date
of completion.
10 Gain / (loss) for period from discontinued operations (continued)
Statfjord Tranche: This tranche is USD 4 million and conditional on acquiring
an interest in the Statfjord Ost Field and Sygna fields. Upon completion of
this acquisition JAPEX will subscribe a further USD 4 million in Longboat
JAPEX. On 30 June Longboat Norge entered into an SPA to acquire a 4.8%
interest in the Statfjord Øst Unit and a 4.3% unitised interest in the Sygna
Unit from INPEX Idemitsu Norge AS which was subject to completion conditions.
The probability of not achieving completion before the long stop date of 31
January 2024, was estimated at 15%, giving a risked contingent payment of 85%
x USD4 million = USD3.4 million. A change of 5 percentage points in
probability of the completion of the Statfjord Satellites acquisition would
result in a 6 percentage point movement in the Statfjord Sattalites tranche,
equivalent to USD 0.2 million.
As at 31 December 2023 the fair value was not deemed to have materially
changed as the conditions remained outstanding. The transaction completed
subsequent to the period end upon satisfaction of the conditions.
Velocette tranche: If this well had been a discovery, based on its size and
approval of the field development plan (PDO), JAPEX would have subscribed a
further USD 30 million.
The probabilities of the differing discovery sizes were calculated and
weighted and the total weighted risked consideration for this tranche was
estimated at USD 3.45 million discounted at 10%. A change of 5 percentage
points in probability of discovery on Velocette would lead to a 14 percentage
point change in the fair value of the Velocette tranche, equivalent to USD
0.43 million (£0.33 million). A change of discount rate by 1 percentage
point would lead to a 3 percentage point change in the Velocette trance fair
value, equivalent to USD 0.08 million (£0.06 million).
Total fair value of consideration:
USD million (dominated in agreement) GBP million (equivalent for reporting)
Tranche 1: 16.0 12.24
Tranche 2: 3.4 2.61
Tranche 3: 3.45 2.64
Total: 22.85 17.49
As this represents the 49.9% of the investment that was sold, this is grossed
up to represent the 50.1% retained interest, giving £17.55 million as the
fair value of the retained investment value.
During the year and subsequent to the transaction, the Velocette well was
confirmed as non-commercial and as a result the investment in equity accounted
joint venture was impaired by an amount equivalent to the contingent
consideration associated with this tranche (£2.64 million), reducing the
carrying value of the investment. See note 15 for more information.
At the date of completion, the assets and liabilities of Longboat JAPEX were
deconsolidated reflecting the loss of control of the subsidiary. Details of
the balances at the date of completion are shown below:
Assets and liabilities deconsolidated 14 July 2023
Intangible assets 23,166,865
Property, plant and equipment 42,013
Tax recoverable 39,429,854
Cash 1,693,429
Other current assets 1,349,818
Total assets 65,681,978
Exploration finance facility 35,710,740
Other current liabilities 2,621,719
Deferred tax 16,548,598
Other long term liabilities 3,710,329
Total liabilities 58,591,386
Net Assets 7,090,592
10 Gain / (loss) for period from discontinued operations (continued)
During the year, on completion of committed exploration activity, the
Directors of Longboat JAPEX have evaluated the potential future cashflows from
each licence. If drilling was completed, no commercial reserves discovered and
no further prospectivity identified, then the licence was deemed to be fully
impaired. For licences where further appraisal would be required to confirm
possible further prospectivity, a judgement has been made, based on
operator/partnership interest in further appraisal, and on the likely outcome
of possible appraisal/development activity, to assess whether the licence
should be written off. On conclusion of this assessment the Directors of
Longboat JAPEX have concluded in the period prior to the disposal of the
subsidiary that it is appropriate to write off the value of the wells and
associated licence costs for PL939 Egyptian Vulture £10.4 million. Smaller
write offs in relation to additional exploration expenses on the already
impaired PL901 Rodhette; PL1060 Ginny/Hermine; PL1049 Cambozola, and PL1017
Copernicus have also been incurred in the year.
11 Earnings per share
2023 2022
GROUP £ £
Number of shares
Weighted average number of ordinary shares for basic earnings per
Share 56,670,294 56,666,665
Weighted average number of potentially dilutive shares from share options in 3,428,569 -
issue in the year
Earnings
Earnings for basic and diluted earnings per share being net loss
attributable to equity shareholders of the Company for:
Continuing operations (9,303,593) (2,592,473)
Discontinued operations 5,116,559 (12,880,134)
Earnings per share (expressed in pence)
Basic and diluted from continuing operations (16.42) (4.57)
Basic from discontinued operations 9.03 (22.73)
Dilutive from discontinued operations 8.51 (22.73)
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of shares outstanding
during the period.
Diluted earnings per share is calculated using the weighted average number of
shares adjusted to assume the conversion of all dilutive potential ordinary
shares, being 3,428,569 for 2023 (2022: 2,205,185). Share options and awards
are not included in the dilutive calculation for loss making periods because
they are anti-dilutive.
12 Asset Acquisition
On 13 September 2023, Longboat Energy announced it had entered into a sale and
purchase agreement to acquire all of the issued share capital of Topaz Number
One Limited whose sole asset is a 15.75% interest in Block 2A. On 21 December
2023 this transaction completed and as a result, this newly acquired interest
in Block 2A, combined with the existing holding via Longboat Energy 2A
Limited, gives Longboat a combined 52.5% interest in the Block 2A PSC with
partners Petronas Carigali Sdn.Bhd (40%) and Petroleum Sarawak Exploration
& Production Sdn. Bhd. (7.5%).
The fair value of the consideration paid and payable for the 100% share in
Topaz number One limited was $403,000 (£318,794).
12 Asset Acquisition (continued)
The fair value of the assets and liabilities acquired as at 21 December are
shown below:
2023
Assets: £
Exploration assets 377,366
Accounts receivable 81
Under/overcall 83,917
Liabilities:
Accounts payable (111,295)
Accruals (31,275)
Net assets at fair value 318,794
Consideration:
Equity issued on completion ($100,000) 79,106
Contingent fair value consideration ($303,000) 239,688
Total consideration 318,794
As part of the purchase agreement with the vendor of Topaz Number One Limited,
the consideration was made up of three tranches.
· Tranche 1 was equivalent to $0.1 million, settled in Longboat
Energy plc shares on completion of the transaction on 21 December 2023.
· Tranche 2 is contingent and will be payable on the earlier of a
positive well drilling decision for Block 2A or the event of farm out (farm
out must be agreed within 5 years). This payment will be $0.125 million,
payable in shares of Longboat Energy plc.
· Tranche 3 (part 1) is contingent on an exploration well
announcement in excess of 600bcf (well must commence drilling within 5 years).
The payment will be equivalent of $1 million and will be settled in cash or
allotment of shares in Longboat Energy plc, at the discretion of the Company.
· Tranche 3 (part 2) is contingent on the growth in Longboat share
price. The payment will be equivalent of up to $2 million, based on the table
shown below, and will be settled in cash or allotment of shares in Longboat
Energy plc, at the discretion of the Company.
Growth in Longboat Shares Average Price Consideration
% USD
0-9.9% 0% -
10-24.9% 33% 666,667
25-49.9% 67% 1,133,333
>=50% 100% 2,000,000
If a liquidity event occurs, involving the sale of Topaz Number One's share in
Block 2A then Tranche 3 will be calculated instead upon the proceeds of the
liquidity event, but capped at the total of $3 million, as above.
To calculate the fair value of the consideration at time of acquisition, a
base case, low case and liquidity case scenario were risked, weighting and
discounted, taking into account the expected chance of farm down, expected
chance of >600bcf discovery and the expected impact on the share price.
Also included was the liquidity scenario where the chance of a sale of the
interest in the block was estimated.
At the acquisition date the fair value of the contingent consideration was
calculated to be $0.3 million (£0.2 million).
A change of probability of geological discovery by 5 percentage points would
lead to a 20% change in the fair value consideration of Topaz, equivalent to
USD 0.06 million (£0.05 million).
13 Exploration and evaluation assets
2023 2022
GROUP £ £
Cost
At 1 January 34,661,436 23,988,754
Additions 2,013,790 53,588,635
Exploration asset acquisition 377,366 -
Foreign currency adjustments (2,955,897) (38,932)
Exploration write-off (10,427,155) (42,877,021)
Disposal (23,097,028) -
At 31 December 572,512 34,661,436
Carrying amount
At 31 December 572,512 34,661,436
On 11 Jan 2023 the Group announced an award of a 30% interest in Licence 1182S
via the Norwegian 2022 APA licensing Round in the joint venture company
Longboat JAPEX.
On 1 February 2024 the Group announced the completion of a farm down of
two exploration licences on the Norwegian Continental Shelf, in the joint
venture company Longboat JAPEX.
On 15 February 2023 the Group announced it had been awarded a Production
Sharing Contract for Black 2A under the Malaysian Bid Round.
See note 29 for more details.
COMPANY
The Company does not have any exploration and evaluation assets at the end of
the period.
14 Property, plant and equipment
Right of use Fixtures and
assets fittings Computers Total
GROUP £ £ £ £
Cost
At 1 January 2022 580,044 3,340 37,033 620,417
Additions - 42,570 17,333 59,903
Foreign currency adjustments 3,516 21 55 3,592
At 31 December 2022 583,560 45,931 54,421 683,912
Additions 30,359 - 6,576 36,935
Disposal (558,480) (40,294) (20,693) (619,467)
Foreign currency adjustments (55,439) (4,230) (2,172) (61,841)
At 31 December 2023 - 1,407 38,132 39,539
Accumulated depreciations and
impairment
At 1 January 2022 19,335 167 10,606 30,108
Charge for the year 117,099 7,772 16,787 141,658
Foreign currency adjustments (270) (343) (744) (1,357)
At 31 December 2022 136,164 7,596 26,649 170,409
Charge for the year 35,671 2,561 7,918 46,150
Disposal (183,692) (10,782) (11,161) (205,637)
Foreign currency adjustments 11,858 1,564 4,834 18,256
At 31 December 2023 - 938 28,240 29,178
Carrying amounts
At 31 December 2023 - 469 9,892 10,361
At 31 December 2022 447,396 38,335 27,772 513,503
14 Property, plant and equipment (continued)
Fixtures and fittings
Computers Total
COMPANY £ £ £
Cost
At 1 January 2022 - 27,966 27,966
Additions 1,407 3,591 4,998
Disposals - - -
At 31 December 2022 1,407 31,557 32,964
Additions - 6,575 6,575
At 31 December 2023 1,407 38,132 39,539
Accumulated depreciations and
Impairment
At 1 January 2022 - 8,398 8,398
Charge for the year 469 9,831 10,300
At 31 December 2022 469 18,229 18,698
Charge for the year 469 10,010 10,479
At 31 December 2023 938 28,240 29,178
Carrying amounts
At 31 December 2023 469 9,892 10,361
At 31 December 2022 938 13,328 14,266
15 Investments
On 14 July 2023 Longboat Norge issued new shares, representing 49.9% of its
total enlarged issued share capital, to JAPEX. This share issue resulted in
Longboat Energy losing its controlling interest in its subsidiary and created
a new joint venture investment with JAPEX, where the Company and JAPEX hold
equal voting rights over the renamed Longboat JAPEX.
This legal entity is held in the Group accounts as an Investment in joint
venture and is accounted for using the Equity method of accounting. See Note
10 for details of fair value calculations.
2023 2022
Group £ £
Investments in joint venture 12,461,890 -
Cost or valuation
At 31 December 2022 - -
Fair value of Joint Venture of Longboat JAPEX 17,555,139 -
Loss from investment in Longboat JAPEX (2,803,202) -
Impairment (Velocette contingent consideration) (2,639,976) -
Foreign exchange 349,929
At 31 December 2023 12,461,890 -
15 Investments (continued)
Company Name Address Incorporated Class of shares Holding Voting rights
Longboat JAPEX Norge AS Strandkaien 36, 4005 Stavanger, Norway. 5 Dec 2019. Ordinary 50.1% 50%
Longboat JAPEX Norge Balance sheet 31 December 2023
£
Exploration and Evaluation assets 24,237,501
Other non-current assets 360,685
Tax receivable 17,391,893
Cash 8,098,337
Other current assets 2,922,725
Exploration Financing Facility (EFF) (16,024,050)
Other current liabilities (4,516,903)
Deferred tax (17,277,769)
Other non-current liabilities (582,836)
Net Assets 14,609,583
Longboat share: 50.1% 7,319,401
Longboat JAPEX Income statement (15 July - 31 December 2023)
£
Exploration write off (17,247,984)
Exploration Financing Facility fees (1,515,610)
Other operating costs (770,087)
Tax 13,938,468
(5,595,213)
Longboat Energy share: 50.1% (2,803,202)
In the period from 15 July 2023 to 31 December 2023 following the formation of
the Joint venture with JAPEX, the majority of the loss relates to the write
off of the Velocette licence costs (£17.2 million), EFF fees (£1.5 million)
and general overheads (£0.8 million) offset partially by a tax credit (£13.9
million).
In January 2024 the existing Acquisition Bridge Facility of July 2023, whereby
JAPEX Petroleum Exploration Co Ltd provided Longboat JAPEX with access to USD
100,000.000, was re-executed ahead of a drawdown to finance in part the
acquisition of the Statfjord Satellite interests. The intended partial
drawdown under this facility was also announced in July 2023. The
Acquisition Bridge Facility is guaranteed by Longboat Energy plc.
Longboat Energy plc also acts as a guarantor for Longboat JAPEX in its
obligations to the Norwegian State in connection with its offshore activities
whereby it undertakes to pay any costs incurred by the public authorities
which ought to have been performed by Longboat JAPEX. The company accounts
for guarantee contracts in accordance with IFRS 9. Having assessed the
expected credit losses no value is currently considered attributable to the
guarantee contract.
15 Investments (continued)
2023 2022
COMPANY £ £
Investments in subsidiaries 418,794 -
Investment in joint venture 13,465,865 13,465,865
13,884,659 13,465,865
The Company or company's investments at the Statement of Financial Position
date in the share capital of companies include the following:
Company Name Address Incorporated Class of shares Holding %
Longboat JAPEX Norge AS Strandkaien 36, 4005 Stavanger, Norway. 5 Dec 2019. Ordinary 50.1
Longboat Energy 2A Limited Hudson House, 8 Tavistock Street, London 16 Jan 2023 Ordinary 100
Topaz Number One Limited Hudson House, 8 Tavistock Street, London 6 Jul 2022 Ordinary 100
Longboat Energy (SE Asia) Sdn.Bhd Level 30-32, Menara Prestige, No 1, Jalan Pinang, Kuala Lumpur, 5040 19 Oct 2023 Ordinary 100
During the year, the Company assessed the carrying value of the investments
for indicators of impairment. No impairments were recognised in the period.
Movements in non-current investments
Subsidiaries
£
Cost or valuation
At 1 January 2022 26,617,915
Impairment (13,152,050)
At 31 December 2022 13,465,865
Loss of control of Longboat Energy Norge AS (13,465,865)
Equity injection into Longboat Energy 2A Limited 100,000
Purchase of Topaz Number One Limited 318,794
At 31 December 2023 418,794
Cost or valuation Joint Ventures
£
At 31 December 2022 -
Initial recognition of equity accounted joint venture - cost 13,465,865
13,465,865
16 Inventories
2023 2022
GROUP £ £
Materials and supplies - 123,432
Closing inventories are equal to their net realisable value.
COMPANY
The Company did not hold any inventory at the year end.
17 Trade and other receivables
2023 2022
GROUP £ £
Non-current
Prepayments - 98,368
Current
Trade receivables 79,409 14,073
Receivables from joint venture 848,602 -
VAT recoverable 189,833 182,160
Other receivables 128,818 23,144
Prepayments 96,689 715,541
1,343,351 934,918
1,343,351 1,033,286
COMPANY
Non-current
Amounts owned by subsidiary undertakings 887,373 3,795,966
Less expected credit loss (443,687) (815,271)
443,686 2,980,695
Current
Receivables from joint venture 848,602 -
VAT recoverable 186,442 109,474
Other receivables 42,740 23,144
Prepayments 96,689 107,902
1,174,473 359,422
1,618,159 3,340,117
The directors consider that the carrying amount of trade
and other receivables approximates to their fair value.
17 Trade and other receivables (continued)
Amounts due from group undertakings are unsecured, interest free, have no
fixed date of repayment and are repayable on demand.
Analysis, which considers both historical and forward looking qualitative and
quantitative information is performed by Management to determine whether the
credit risk has significantly increased since the time the receivable was
initially recognised. The Group's current receivables balance of £1.3 million
have been assessed and no ECL provision has been determined to apply. The
Company has a receivables balance of £1.6 million, which includes a £0.4
million ECL provision against receivables from the Longboat Energy 2A Limited
subsidiary based on probability of repayment having considered the risks
associated with the underlying assets of the company.
18 Current tax recoverable
2023 2022
£ £
GROUP
Current tax receivables - 40,755,157
2023 2022
£ £
COMPANY
Current tax receivables - -
19 Trade and other payables and current financial liabilities
2023 2022
GROUP £ £
Trade payables 257,903 2,840,806
Accruals 149,808 1,373,032
Social security and other taxation 114,386 302,900
Payables to joint venture 351,913 -
Other payables 20,227 708,760
Trade and other payables 894,237 5,225,497
Exploration Financing Facility - 36,761,340
Short term bank borrowing - 36,761,340
2023 2022
COMPANY £ £
Trade payables 157,464 95,554
Accruals 74,186 183,690
Social security and other taxation 114,386 95,016
Intercompany payables - 74,485
Payables to associates 317,028 -
Other payables 20,227 9,511
683,291 458,256
The directors consider that the carrying amount of trade and other payables
approximates to their fair value.
20 Lease liabilities
Longboat JAPEX has lease contracts for buildings used in its operations. The
lease for its Stavanger office was signed in September 2021. The obligations
under its leases are secured by the lessor's title to the leased assets.
Set out below are the carrying amounts of right of use assets recognised and
the movements during the period, noting that from 14 July 2023 the assets and
liabilities of Longboat JAPEX were deconsolidated.
2023 2022
£ £
At 1 January 447,396 560,709
Additions 30,359 -
Depreciation charge for the year (35,671) (117,099)
Disposal* (400,376) -
Foreign exchange (41,708) 3,786
At 31 December - 447,396
Set out below are the carrying value of lease liabilities and the movements.
2023 2022
£ £
At 1 January 489,580 582,802
Additions 31,730 -
Interest 18,444 14,510
Payments made (92,756) (103,812)
Disposal* (414,908) -
Foreign exchange (32,090) (3,920)
At 31 December - 489,580
2023 2022
£ £
Within one year - 122,612
In two to five years - 366,968
- 489,580
£ £
Maturity analysis
Within one year - 134,971
In two to five years - 382,419
Total undiscounted liabilities - 517,390
Future finance charges and other adjustments - (27,810)
Lease liabilities in the financial statements - 489,580
20 Lease liabilities (continued)
2023 2022
Amounts recognised in profit or loss, under discontinued operations include £ £
the following:
Depreciation expense of right of use assets (35,671) (117,099)
Foreign exchange on depreciation - -
Interest expense for right of use liabilities (18,444) (14,510)
*As at the 14 July, the assets of Longboat JAPEX (formerly Longboat Norge)
were deconsolidated from the Group as a result of the Company losing control
of the subsidiary to create a Joint Venture with JAPEX.
21 Deferred taxation
GROUP
The following are the deferred tax liabilities and assets recognised and
movements thereon during the current and prior reporting period.
ACAs
£
Deferred tax balance at 1 January 2022 18,766,424
Deferred tax movements in prior year
Differences in tax basis for offset of tax losses in Norway 7,114,216
Foreign exchange (143,742)
Deferred tax liability at 31 December 2022 25,736,898
Deferred tax movements in current year
Differences in tax basis for offset of tax losses in Norway (8,385,916)
Foreign exchange (892,384)
Disposal (16,458,598)
Deferred tax liability at 31 December 2023 -
The Group has not recognised a deferred tax asset within Longboat Energy, as
there is no evidence to support their recoverability in the near future.
22 Financial risk management
The Group is exposed to financial risks through its various business
activities. In particular changes in interest rates and exchange rates can
have an effect on the capital and financial situation of the Group. In
addition, the Group is subject to credit risks.
The Group has adopted internal guidelines, which concern risk control
processes and which regulate the use of financial instruments and thus provide
a clear separation of the roles relating to operational financial activities,
their implementation and accounting, and the auditing of financial
instruments. The guidelines on which the Group's risk management processes are
based are designed to ensure that the risks are identified and analysed across
the Group. They also aim for a suitable limitation and control of the risks
involved, as well as their monitoring.
The Group controls and monitors these risks primarily through its operational
business and financing activities.
Credit Risks
The credit risk describes the risk from an economic loss that arises because a
contracting party fails to fulfil their contractual payment obligations. The
credit risk includes both the immediate default risk and the risk of credit
deterioration, connected with the risk of the concentration of individual
risks. For the Group, credit and default risks are concentrated in the
financial institutions in which it places cash deposits.
The Group's policy is to place its cash with banks with an appropriate credit
rating in accordance with the Company's Treasury Risk Management Policy.
Notwithstanding existing collateral, the amount of financial assets indicates
the maximum default risk in the event that counterparties are unable to meet
their contractual payment obligations. The maximum credit default risk
amounted to £4,741,369 (2022: £12,096,778) at the balance sheet date, of
which £3,684,541 (2022: £12,059,561) was cash on deposit at banks.
Liquidity Risks
Liquidity risk is defined as the risk that a company may not be able to fulfil
its financial obligations. The Group manages its liquidity by maintaining cash
and cash equivalents sufficient to meet its expected cash requirements. The
Group has highlighted a material uncertainty around its liquidity in the audit
report and the going concern note.
At 31 December 2023, the Group had cash on deposit of £3,684,541 (2022:
£12,059,561).
Market Risks
Interest Rate Risks
Interest rate risks exist due to potential changes in market interest rates
and can lead to a change in the fair value of fixed-interest bearing
instruments, and to fluctuations in interest payment for variable interest
rate financial instruments.
The Group was exposed to Interest rate risks through the Groups Exploration
Facility in Norway. The table below shows the impact in GBP on pre-tax
profit and loss in the joint venture of a 10% increase/decrease in the
interest rates, holding all other variables constant.:
2023 2022
£ £
Interest rate increase/decrease by 10% 76,578 80,740
22 Financial risk management (continued)
The Group is exposed to interest rate risks on cash held on deposit at banks.
Interest income for the year to 31 December 2023 was £155,397 (2022:
£150,869). These accounts are maintained for liquidity rather than
investment, and the interest rate risk on deposits is not considered material
to the Group.
Currency risks
The Group operates in the UK, Norway and Malaysia, incurs expenses in
sterling, United States dollars, Malaysian Ringgit ("MYR") and Norwegian
kroner ("NOK"), and holds cash in sterling, US dollars, MYR and NOK. The Group
incurs some expenditure in foreign currency when the investment policy
requires services to be obtained overseas. The foreign exchange risk on these
costs is not considered material to the Group.
The Group's exposure to foreign currency risk at the end of the reporting
period is summarised below. All amounts are presented in GBP equivalent.
2023 2022
Cash and cash equivalents 2,540,427 9,409,636
Trade and other receivables 353 41,309,057
Trade and other payables including borrowings (788,127) (41,129,225)
Lease liabilities - (489,580)
Net exposure 1,752,653 9,099,888
Sensitivity analysis
As shown in the table above, the Company is exposed to changes in exchange
rates through its balances held in non-GBP. The table below shows the impact
in GBP on pre-tax profit and loss of a 10% increase/decrease in the exchange
rates, holding all other variables constant.
2023 2022
Exchange rate increases by 10% 194,739 1,011,099
Exchange rate decrease by 10% (159,332) (827,263)
23 Retirement benefit schemes
2023 2022
GROUP £ £
Defined contribution schemes
Charge to profit or loss in respect of defined contribution schemes
Continuing operations 58,250 55,000
Discontinuing operations 109,985 190,613
168,235 245,613
2023 2022
COMPANY £ £
Defined contribution schemes
Charge to profit or loss in respect of defined contribution schemes 58,250 55,000
The Company does not operate any defined benefit schemes.
24 Share Capital
GROUP & COMPANY 2023 2022 2023 2022
Number Number £ £
Ordinary share capital
Issued and fully paid
Ordinary shares of 10p each 57,108,120 56,666,666 5,710,812 5,666,666
On 29 December 2023, on completion of the Topaz Number One acquisition, new
ordinary shares in Longboat Energy equivalent to $100,000 were issued to the
previous owners of the company, representing tranche 1 of the consideration,
see Note 12 for more details. At the time of issue, $100,000 equated to
441,455 new shares.
25 Share premium account
2023 2022
£ £
At 1 January 35,570,411 35,570,411
Issues of new shares 34,959 -
Costs of share issues - -
At 31 December 35,605,370 35,570,411
26 Share option reserve
2023 2022
£ £
At 1 January 660,449 353,550
Arising in the year 364,037 306,899
At 31 December 1,024,486 660,449
During the year, Longboat Energy operated three share incentive schemes: the
Founder Incentive Plan (FIP), the Long-Term Incentive Plan (LTIP) and the
Co-investment plan (CIP Details of the schemes are summarised in the
Remuneration Report prepared by the Remuneration Committee on pages 32 to 3.
Founder Incentive Plan
For the purpose of determining the fair value of an award, the following
assumptions have been applied and a valuation calculation run through the
Monte Carlo Model:
Grant date - 3 July 2020 and 24 September 2020 £
Weighted average share price at grant date 0.78
TSR performance -
Risk free rate -0.08%
Dividend yield -
Volatility of Company share price 50.44%
The risk-free rate assumption has been set as the yield as at the calculation
date on zero coupon government bonds of a term commensurate with the remaining
performance period.
The historical 3 year volatility of the constituents of the FTSE AIM Oil &
Gas supersector, as of the date of grant, was used to derive the volatility
assumption.
The weighted average exercise price of outstanding options is nil.
The weighted average remaining contractual life as at 31 December 2023 is 12
months.
26 Share option reserve (continued)
Co-Investment Plan (CIP) awards
For the purpose of determining the fair value of an award, the following
assumptions have been applied and a valuation calculation run through the
Monte Carlo Model:
Grant date 3 Aug 23 10 Feb 22 (Part A) 10 Feb 22 (Part B) 02 Jul 21
Performance period (years) 3 3 3 3
Share price at grant date £0.30 £0.57 £0.57 £0.70
Exercise price Nil £0.10 £0.10 £0.10
Risk free rate 4.73% 1.35% 1.35% 15.00%
Dividend yield 0% 0% 0% 0%
Volatility of Company share price 62% 50% 50% 51.00%
Fair value per award £0.18 £0.19 £0.24 £0.38
2023 2022 Weighted average fair
No. No. value (£ per share)
Outstanding at beginning of the period 794,505 639,900- £0.35
Granted during the period 314,215 154,605 £0.18
Forfeited during the period - - -
Exercised during the period - - -
Expired during the period - - -
Outstanding at the end of the period 1,108,720 794,505 £0.30
Exercisable at the end of the period - - -
The weighted average exercise price of outstanding options is £0.07.
The weighted average remaining contractual life as at 31 December 2023 is 14
months.
Long Term Incentive Plan
The awards have been valued using the Monte Carlo model, which calculates a
fair value based on a large number of randomly generated simulations of the
Company's TSR.
Grant date 3 Aug 23 7 Jan 22 12 Aug 22 8 Nov 21 1 Oct 21 2 Jul 21 2 Jul 21 24 Sep 20
Weighted average share price at grant date £0.305 £0.624 £0.430 £0.705 £0.780 £0.720 £0.720 £0.885
TSR performance - - - - - - - -
Risk free rate 4.73% 0.85% 1.96% n/a 0.60% 0.09% 0.15% -0.1%
Dividend yield 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Volatility of Company share price 62% 50% 52% n/a 50.00% 51.00% 51.00% 58.00%
Weighted average fair value £0.18 £0.27 £0.23 £0.33 £0.36 £0.27 £0.33 £0.33
The risk-free rate assumption has been set as the yield as at the calculation
date on zero-coupon government bonds of a term commensurate with the remaining
performance period.
26 Share option reserve (continued)
The historical three year volatility of the constituents of the FTSE AIM Oil
& Gas supersector, as of the date of grant, was used to derive the
volatility assumption.
2023 2022
Outstanding at 1 January 1,560,600 1,316,500
Awarded during the year 2,472,000 244,100
Exercised during the year - -
Expired during the year - -
Outstanding at the 31 December 4,032,600 1,560,600
Exercisable at the 31 December - -
The weighted average exercise price of outstanding options is £0.10.
The weighted average remaining contractual life as at 31 December 2023 is 22
months.
27 Currency translation reserve
2023 2022
GROUP £ £
At the beginning of the year 561,242 580,996
Currency translation differences on joint venture 349,929
Currency translation difference on disposal of subsidiary (561,242)
Currency translation difference on foreign subsidiaries (39,126) (19,754)
At the end of the year 310,803 561,242
The currency translation reserve relates to the movement in translating
operations denominated in currencies other than sterling into the presentation
currency.
28 Related party transactions
Income (£) Expense (£) Closing receivable (£) Closing payable (£)
Longboat JAPEX Norge AS 1,117,485 1,022,988 848,602 (351,913)
The related party balances arise as a result of the agreements that were
entered into at the time of establishment of the Longboat JAPEX JV and relate
to intercompany recharges between PLC and Longboat JAPEX
Remuneration of key management personnel
Members of the Board of Directors are deemed to be key management personnel.
Key management personnel compensation for the financial period is the same as
the Director remuneration set out in the Corporate Governance Statement.
Other information
Directors' interests in the shares of the Company in the current and prior
period, including family interests, were as follows:
Ordinary shares
2023* 2022*
Helge Hammer 1,077,023 837,023
Jonathan Cooper 341,516 333,432
Graham Stewart 350,000 350,000
Jorunn Saetre 51,667 51,667
Nick Ingrassia 218,366 179,023
*As at the date of publication of the Report and Accounts for each respective
year
Under IAS 24 section 4, all intragroup transactions which have been eliminated
on consolidation are exempt from being disclosed as the Group has prepared
consolidated financial statements.
The Group does not have one controlling party.
29 Subsequent Events
The 17 January 2024 Longboat Energy announced the award to Longboat JAPEX of a
new licences under the Norwegian 2023 APA Licensing Round (Awards in
Predefined Areas): PL 1212 S Block 35/7 Magnolia (Company 20%).
On 1 February 2024 Longboat Energy announced the completion of a farm down
of two exploration licences by Longboat JAPEX on the Norwegian Continental
Shelf. Longboat JAPEX has farmed down its interest in PL1182S from 30%
to 15% in return for a full carry of the Kjøttkake/Lotus exploration well, up
to an agreed cap above the dry well budget. The well is expected to spud in Q3
2024. In PL1049 which contains the Jasmine and Sjøkreps prospects,
Longboat JAPEX has farmed down its interest from 40% to 25% in return for a
carry of an element of the 2024 exploration expenditure, which mainly consists
of seismic costs and studies.
On 1 February 2024 Longboat Energy announced the completion of the
acquisition by Longboat JAPEX of a 4.80% unitised interest in the Statfjord
Øst Unit and a 4.32% unitised interest in the Sygna Unit. The acquisition of
the Statfjord Satellites has been funded by a combination of the investment by
JAPEX into Longboat JAPEX, cash on hand and a drawing of approximately US$15
million (£11.8 million) on the Acquisition Bridge Facility provided by JAPEX
to Longboat JAPEX. The consideration is broken down into two tranches:
Tranche 1 is the amount paid upon completion of USD 12.75 million (£10.02
million). Tranche 2 is deferred consideration of USD 1.75 million (£1.38
million) that is paid in four instalments as follows:
· USD 437,500 (£343,784) on the completion date
· USD 437,500 (£343,784) 6 months after completion
· USD 437,500 (£343,784) 12 months after completion
· USD 437,500 (£343,784) 18 months after completion
As the vast majority of the deferred consideration is settled within 12 months
of completion it is deemed that discounting is not material to the
transaction.
In addition to the above a pro & contra payment has been made by Longboat
JAPEX to the vendor for cash calls etc paid by the vendor during the Interim
Period. This has been calculated as USD 7.2 million, (£5.7 million)
therefore, the fair value of the consideration is USD 22 million (£17.3
million).
30 Cash absorbed by continuing operations
2023 2022
GROUP £ £
Loss for the year after tax before other comprehensive income (9,303,593) (2,592,473)
Add back:
Loss from investment 2,803,202 -
Write down 2,639,976
Interest payable 51 112
Interest receivable (155,397) (42,486)
Depreciation 10,479 10,300
Equity settled share based payment expense 199,017 157,757
Movements in working capital:
Increase in inventories - -
Decrease in trade and other receivables (884,733) (144,926)
Increase in trade and other payables 737,266 (4,776)
Cash absorbed by operations 3,953,732 (2,616,492)
31 Cash absorbed by discontinuing operations
2023 2022
GROUP £ £
Loss for the year after tax before other comprehensive income 5,116,559 (12,880,133)
Add back:
Taxation credited (9,411,827) (33,915,741)
Gain on deconsolidation (10,464,548) -
Write offs 10,427,155 42,877,022
Depreciation 5,007 14,259
Interest payable 1,191,918 938,121
Interest receivable (41,589) (108,382)
Share based payment expense 74,309 148,682
Timewriting adjustment (425,002) (732,123)
Historic bank fees 124,690 206,039
Lease depreciation 35,671 117,099
Least interest (59,290) (89,303)
EFF commitment fee 175,521 344,583
Movements in working capital:
Increase in inventories - -
Decrease in trade and other receivables 126,667 (452,498)
Increase in trade and other payables 461,417 2,330,300
Cash absorbed by operations 2,663,342 4,957,680
32 Cash flows related to borrowing and debt
Current bank borrowings Finance lease liabilities Total
At January 2023 36,761,340 489,580 37,250,920
Cash flows from discontinued operations
Cash payments on lease - (66,980) (66,980)
Loan drawdowns 3,394,643 - 3,394,643
Interest and fees paid (1,367,491) - (1,367,491)
Debt removed from Group on disposal of subsidiary (35,166,144) (414,908) (35,581,052)
Non-cash adjustments from discontinued operations
Effect of foreign exchange (4,989,839) (7,692) (4,997,531)
Interest and fees accrued 1,367,491 - 1,367,491
At 31 December 2023 - - -
Current bank borrowings Finance lease liabilities Total
At January 2022 - 582,802 582,802
Cash flows from discontinued operations
Cash payments on lease - (103,812) (103,812)
Loan drawdown 36,761,340 - 36,761,340
Interest and fees paid (1,283,102) - (1,283,102)
Non-cash adjustments from discontinued operations
Interest and fees accrued 1,283,102 10,590 10,590
At 31 December 2022 36,761,340 489,580 37,250,920
LONGBOAT ENERGY PLC 2023 DISCLOSURE UNDER SASB OIL AND GAS EXPLORATION AND
PRODUCTION STANDARD
This document provides information as to the alignment of disclosures made by
Longboat Energy plc, its jointly controlled subsidiary Longboat JAPEX Norge AS
and Longboat Energy (2A) Limited, referred to as "the Group", with the
Sustainability Accounting Standards Board (SASB) Oil & Gas Exploration and
Production Standard (Version 2023-06). The information herein is associated
with the 2023 calendar year. The GHG emissions calculated in the SASB report
are from the one exploration well that Longboat JAPEX Norge AS participated
in. There were no physical operations with scope 1 emissions in Malaysia,
hence no associated GHG emissions.
Longboat JAPEX Norge AS, is referred to as 'Longboat JAPEX'.
SUSTAINABILITY DISCLOSURE TOPICS & ACCOUNTING METRICS
Code Accounting Metric Location/Information
GREENHOUSE GAS EMISSIONS
EM-EP-110a.1 Gross global Scope 1 emissions, percentage methane, percentage covered under Gross 797.3 tonnes GHG (CO(2,) CO, N(2)O, nmVOC, NOx and SOx) 0 Methane
emissions-limiting regulations emission
793.8 tonnes of the GHG are CO(2)
Emissions are Longboat JAPEX' equity share from drilling operation on the
Velocette well.
0% covered under emission-limiting regulations.
EM-EP-110a.2 Amount of gross global Scope 1 emissions from: LJN has only participated in the drilling of one exploration wells with
semi-submersible and jack up rig in 2023. LJN had no production in 2023, hence
(1) flared hydrocarbons, all items are non-applicable (N/A).
(2) other combustion,
(3) process emissions,
(4) other vented emissions, and
(5) fugitive emissions
EM-EP-110a.3 Discussion of long-term and short-term strategy or plan to manage Scope 1 Longboat JAPEX has been established with the aim of being a leading Norwegian
emissions, emissions reduction targets, and an analysis of performance against independent which is specialized in upstream oil and gas activities in Norway
those targets on a long-term basis by retaining excellent HSEQ and ESG performance. This is
well aligned to Longboat Energy plc and JAPEX's ESG targets of 'Net Zero' on a
scope 1 and 2 basis by 2050. LJN will pursue a predominantly development-led
strategy with vision to create a growth profile focused on long-term value
creation for shareholders. Longboat JAPEX will initially seek to make
one-or-more acquisitions to create a portfolio of development projects to
delivering production in excess of 15,000-20,000 boepd and 2P reserves of
50-70 mmboe within 3-5 years. The main source of greenhouse gas emissions from
2023 relates to the drilling of one exploration well on the NCS. LJN's natural
gas focused portfolio of exploration licences are in mature areas with
existing infrastructure to tie-in to. Upon success this will contribute to low
carbon footprint energy. Through licence participation in development
activities, Longboat JAPEX will assess options such as renewable power from
shore, offshore wind power and ammonia production with CO(2) capture and
storage to reduce GHG emissions. Upon being profitable LJN will also look at
nature-based solutions to offset its GHG emissions.
We recognise the combined challenge of meeting increasing energy needs driven
by a growing global population and the urgent need to reduce global carbon
emissions.
The Group supports the UN Sustainable Development Energy Goal and plans to
develop its business so that it has a sustainable strategy as an oil and gas
company providing safe and responsible energy at a low cost with low
emissions.
Accordingly, the Group is committed to:
· supporting the energy transition through playing an active role
to promote best practice in environmental stewardship;
· pursuing a strategy of delivering low Scope 1 and Scope 2
emissions per barrel, to minimise carbon intensity of operations (including no
routine flaring) and transparent annual disclosure of GHG emissions;
· prioritising renewable energy sources in the powering of operated
and non-operated platforms where possible;
· using an internal carbon price for investment decisions; and
· being net zero by 2050 with an earlier target date to be set
dependent on the profile of the assets developed/acquired
AIR QUALITY
EM-EP-120a.1 Air emissions of the following pollutants: Longboat JAPEX's drilling operations of one exploration well:
(1) NOx (excluding N2O), 1. NOx: 2.0 tonnes
(2) SOx, 2. SOx: 0.24 tonnes
(3) volatile organic compounds (VOCs), 3. VOCs: 1.24 tonnes
(4) particulate matter (PM10) 4. n/a
WATER MANAGEMENT
EM-EP-140a.1 (1) There has not been any measure of fresh water during the Velocette
Operation.
(1) Total fresh water withdrawn,
(2) N/A as the Group's principal activities were in Norway where water is not
(2) total fresh water consumed, percentage of each in regions with High or a scarce resource
Extremely High Baseline Water Stress
EM-EP-140a.2 Volume of produced water and flowback generated; percentage (1) .
discharged, (2) injected, (3) recycled; hydrocarbon content in discharged
N/A as the Group did not have any ownership in any producing fields in 2023
water
EM-EP-140a.3 Percentage of hydraulically fractured wells for which there is public N/A as the Group did not have any ownership in any producing fields in 2023,
disclosure of all fracturing fluid chemicals used nor any hydraulic fracturing.
EM-EP-140a.4 Percentage of hydraulic fracturing sites where ground or surface water quality N/A as the Group did not have any ownership in any producing fields in 2023,
deteriorated compared to a baseline nor undertakes any hydraulic fracturing.
BIODIVERSITY IMPACTS
EM-EP-160a.1 Description of environmental management policies and practices for active As stated in the Group's HSEQ Policy, the Group is committed to respecting and
sites preserving the natural environment. The policy is to minimise the undesirable
effects on the environment resulting from the Group's operations and to work
to prevent pollution and reduce emissions. The Group will assess and manage
its performance to continually improve its environmental performance.
Permits and consents from the relevant authorities are required for the
operator to execute the Drilling Operations, and strict reporting requirements
are in place.
BIODIVERSITY IMPACTS (CONTINUED)
EM-EP-160a.2 Number and aggregate volume of hydrocarbon spills, volume in Arctic, volume All chemical use and discharge were within the limits described in the
impacting shorelines with ESI rankings 8-10, and volume recovered approved Discharge Permit
EM-EP-160a.3 Percentage of (1) N/A
(1) proved and
(2) N/A
(2) probable reserves in or near sites with protected conservation status or
N/A as the Group had no reserves in 2023.
endangered species habitat
SECURITY, HUMAN RIGHTS & RIGHTS OF INDIGENOUS PEOPLES
EM-EP-210a.1 Percentage of N/A as the Group had no reserves in 2023.
(1) proved and
(2) probable reserves in or near areas of conflict
EM-EP-210a.2 Percentage of N/A as the Group had no reserves in 2023.
(1) proved and
(2) probable reserves in or near indigenous land
EM-EP-210a.3 Discussion of engagement processes and due diligence practices with respect to The Group is fully committed to meeting its responsibilities towards its
human rights, indigenous rights, and operation in areas of conflict staff, contractors and third parties who may be impacted by its activities,
and to adhere to all applicable national and local legislation as well as the
principles for business and human rights embodied in international
initiatives, such as the United Nations Global Compact and the United Nations
Guiding Principles on Business and Human Rights. Adhering to and implementing
the Human Rights Policy is a requirement of anyone who works for or on behalf
of the Group. The Company's principal activities are offshore Norway where
Human Rights are well protected and accord with the Group's Human Rights
Policy.
COMMUNITY RELATIONS
EM-EP-210b.1 Discussion of process to manage risks and opportunities associated with The Group's principal activities were focussed offshore Norway and the
community rights and interests operators of its offshore licences have well established environment controls
and procedures for ensuring compliance with any interested parties notably the
fishing industry
EM-EP-210b.2 Number and duration of non-technical delays No delays attributable to community relations.
WORKFORCE HEALTH & SAFETY
EM-EP-320a.1 (1) Total recordable incident rate (TRIR), (2) fatality rate, (1-3) From the drilling operation of one exploration well in 2023 there was
(3) near miss frequency rate (NMFR), and (4) average hours of health, safety, one reported incident to the Petroleum Safety Authorities Norway (PSA):
and emergency response training for 07.09.23 Well control incident. Assumed reason for the event was gain due to
(a) full-time employees, swabbing the well. Classified as a green incident:
(b) contract employees, and
(c) short-service employees
(4) LJN does not operate any of its licence interests and so health and safety
training is limited to ensuring safe conduct and procedures in its offices and
training for a safety representative. At present there are no operational
activities in Malaysia where The Company is operator of PSC Block 2.
WORKFORCE HEALTH & SAFETY (CONTINUED)
EM-EP-320a.2 Discussion of management systems (MS) used to integrate a culture of safety Safety is a core value, and it is a priority that everyone is aware of his /
throughout the exploration and production lifecycle her responsibility towards providing a safe and secure environment. The Group
is committed to ensuring the health and safety of all who work with it and
protecting the environment in which it works. The Group upholds excellent
health and safety standards in order to reduce accidents and ill health within
the workplace and to minimise the impact of its operations on the environment.
The Group also insists that all contractors maintain the same high standards.
All members of staff are familiar with the Group's processes and procedures
with its MS and its emphasis on risk management to minimise the impact of its
activities. LJN does not operate any exploration and production assets,
under the MS and through its 'see to duty' LJN reviews and oversees the
operators' activities to ensure that the health and safety of its workforce
receives the priority it deserves.
To be accepted as a Licence holder in Norway, every company is required to
undergo a thorough pre-qualification process by the Norwegian Petroleum
Directorate (NPD) and The Petroleum Safety Authority Norway (PSA) to ensure
they have the required competencies, capacity and Business Management Systems
in place. LJN was approved by the Ministry of Petroleum and Energy as a
licence holder in August 2021 having been reviewed by the NPD and PSA.
For Malaysia, there is a separate BMS which aligns with the rules and
regulations set by the government in Malaysia and by PETRONAS.
RESERVES VALUATION & CAPITAL EXPENDITURES
EM-EP-420a.1 Sensitivity of hydrocarbon reserve levels to future price projection scenarios At the year end the Group did not have any reserves.
that account for a price on carbon emissions
EM-EP-420a.2 Estimated carbon dioxide emissions embedded in proved hydrocarbon reserves N/A at the year end the Group has no proved hydrocarbon reserves. The
discoveries are classified as resources at the present time with no firm plan
for development.
EM-EP-420a.3 Amount invested in renewable energy, revenue generated by renewable energy N/A as the Group did not invest in any renewable energy in 2023.
sales
RESERVES VALUATION & CAPITAL EXPENDITURES (CONTINUED)
EM-EP-420a.4 Discussion of how price and demand for hydrocarbons and/or climate regulation The Group has been targeting gas with its exploration and business development
influence the capital expenditure strategy for exploration, acquisition, and activities, as it believes i) gas is critically important in the path to net
development of assets zero GHG emissions and even with an aggressive build out of renewables,
considerable upstream capex will be required to facilitate the coal to gas
switch and to overcome natural global gas declines; and ii) Europe's
indigenous gas supplies have fallen , leaving Europe heavily reliant on
Russian gas and imported LNG. Hence, activities to maintain Europe's
indigenous gas supply is an important element for recovering stability and
reliability as part of the energy transition.
BUSINESS ETHICS & TRANSPARENCY
EM-EP-510a.1 Percentage of N/A At the year end the Group did not have any proved or probable reserves.
(1) proved and
(2) probable reserves in countries that have the 20 lowest ranking in
Transparency International's Corruption Perception Index
EM-EP-510a.2 Description of the management system for prevention of corruption and bribery The Group has a dedicated Anti Bribery and Corruption ('ABC') Policy in place
throughout the value chain which demands the highest standard of behaviour and conduct of its directors,
officers and employees, together with all agents, co-ventures, contractors,
suppliers and other third parties acting or purporting to act on its behalf.
The ABC Policy sets out the main policies, procedures and mechanisms adopted
following appropriate risk assessment that are intended to prevent and/or
effectively combat instances of bribery or corruption in the course of the
Group's business and ensure compliance with applicable anti-bribery and
anti-corruption laws in those countries where The Company conducts business.
Whilst the Anti-bribery and Corruption Policy is embedded within the MS, as
The Company's principal activities are focussed in Norway with highly
reputable joint venture partners the probability of any breach is very low.
MANAGEMENT OF THE LEGAL & REGULATORY ENVIRONMENT
EM-EP-530a.1 Discussion of corporate positions related to government regulations and/or The Company supports the energy transition and is committed to achieving 'net
policy proposals that address environmental and social factors affecting the zero' emissions by 2050 or earlier. As The Company becomes involved in
industry developments it will look at solutions to reduce GHG emissions associated with
production and offsetting scope 1 & 2 emissions.
The Company is a member of Norwegian Oil and Gas (NOROG) which is a
professional body and employer's association for oil and supplier companies.
NOROG's views on relevant policy issues are publicly available at www.norog.no
CRITICAL INCIDENT RISK MANAGEMENT
EM-EP-540a.1 Process Safety Event (PSE) rates for Loss of Primary Containment (LOPC) of The Company did not have any ownership in producing assets in 2023.
greater consequence (Tier 1)
EM-EP-540a.2 Description of management systems used to identify and mitigate catastrophic The licence operators and LJN as a non-operator have Management Systems in
and tail-end risks place where risk management is integrated into the work processes and
procedures. The operators on LJN's Licences have separate Emergency Response
Plans exists for level 1, 2 and 3 emergency organisations, including reporting
and normalization. Critical and serious incidents will be investigated, and
regular reviews are carried out on reported incidents for continuous learning.
LJN is a qualified Licence holder in Norway and works in close cooperation
with the operators and other licence holders to plan and follow up any
operations in a safe and environmental responsible manner. LJN has the
required emergency response plans for all aspects of its business as an
integrated part of our Management System.
Review by Qualified Person
The technical information in this release has been reviewed by Hilde Salthe,
Managing Director Norge, who is a qualified person for the purposes of the AIM
Guidance Note for Mining, Oil and Gas Companies. Ms Salthe is a petroleum
geologist with more than 20 years' experience in the oil and gas industry. Ms
Salthe has a Masters Degree from Faculty of Applied Earth Sciences at the
Norwegian University of Science and Technology in Trondheim.
Glossary
"mmboe" Million barrels of oil equivalent
Standard
Estimates of reserves and resources have been prepared in accordance with the
June 2018 Petroleum Resources Management System ("PRMS") as the standard for
classification and reporting.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR FFFLLSSIILISRecent news on Longboat Energy
See all newsREG - Longboat Energy PLC - Holding(s) in Company
AnnouncementRCS - Longboat Energy PLC - Investor Presentation
AnnouncementREG - Longboat Energy PLC - Audited Full Year Results to 31 December 2023
AnnouncementREG - Longboat Energy PLC - Completion of farm-down transaction in Norway
AnnouncementREG - Longboat Energy PLC - Completion of Statfjord Satellites Acquisition
Announcement