REG - Longboat Energy PLC - Completion of SE Asia Acquisition

Longboat EnergyAnnouncement

21/12/2023 07:15

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RNS Number : 5357X  Longboat Energy PLC  21 December 2023

21 December 2023

 
Longboat Energy
plc

("Longboat Energy", "Longboat" or the "Company")

 

Completion of SE Asia Acquisition

 

Longboat Energy, an emerging full-cycle E&P company active in Norway and
Malaysia, is pleased to announce the completion of the acquisition of
privately held Topaz Number One Limited ("Topaz"), thereby increasing its
working interest in the Production Sharing Contract over Block 2A offshore
Sarawak, Malaysia ("Block 2A") to 52.5%.

 

Longboat now holds an operated 52.5% interest in Block 2A, offshore Sarawak
Malaysia, containing the giant 'Kertang' prospect, simplifying the process
towards a positive well decision and the potential introduction of an
additional funding partner prior to drilling.

 

Having worked closely with Topaz and its owners over the past twelve months on
Block 2A and other acquisition opportunities, Longboat made the decision to
accelerate the building of a full-cycle E&P business in SE Asia through
the acquisition of Topaz and the addition of James Menzies and Pierre Eliet to
the Company's management team as Executive Chairman SE Asia and Director SE
Asia respectively.

Helge Hammer, Chief Executive of Longboat Energy, commented:

"We are pleased to have completed the corporate acquisition of Topaz, which
increases our interest in a large exploration block in a region that has seen
considerable exploration success recently. Petronas announced that they have
recorded 19 exploration discoveries, 13 of which were made offshore Sarawak,
and two exploration-appraisal successes, contributing over 1 billion barrels
of oil equivalent to new resources for Malaysia in 2023. Clearly, we are in
the right address.

 

The Longboat team has extensive experience and network in SE Asia, which
combined with our in-house technical expertise, puts us in a strong position
to deliver accelerated growth in the region."

 

Background

 

In February 2023, Longboat announced it had been awarded a 36.75% operated
interest in a Production Sharing Contract for Block 2A alongside partners
Petronas Carigali Sdn. Bhd (40%), Petroleum Sarawak Exploration &
Production Sdn. Bhd. (7.5%) and Topaz Number One Limited (15.75%).

 

Block 2A is located offshore Sarawak, north-west of the prolific Central
Luconia hydrocarbon province covering approx. 12,000km(2) in water depths
between 100 - 1,400 metres. One of the world's largest LNG facilities, the
Bintulu LNG plant, is located onshore on the coast of Sarawak.

 

The main prospect on Block 2A is a large anticlinal structure called Kertang
with a closure of over 100km(2) at multiple levels and significant volume
potential representing multiple trillions of cubic feet (TCF) of gas in
stacked reservoirs. Seismic indicators for the presence of gas can be observed
in the area and over the crest of the prospect.

 

At the same time, the Company indicated its belief that establishing a
presence in the region would open-up further acquisition opportunities.

 

Transaction Detail

 

Under the terms of the 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 (the "Acquisition"), the initial consideration is to be
satisfied through an issue of new ordinary shares of 10 pence each in the
Company ("Ordinary Shares") equivalent to US$100,000 based on the average
closing price of such Ordinary Shares in the preceding ten days, representing
441,470 Ordinary Shares (the "Consideration Shares").

 

There are two further contingent payments to be made: firstly an amount of
US$125,000 payable in cash or through a further issue of Ordinary Shares of an
equivalent value, upon an exploration well being committed on Block 2A or a
farm-out; and a further contingent amount of up to US$3,000,000 payable in
cash or through a further issue of Ordinary Shares of an equivalent value,
upon a discovery being made on Block 2A, depending on the resource size and
the growth in the price of the Ordinary Shares measured over a two year
period.

 

Admission

 

Application will be made for the Consideration Shares to be admitted to
trading on AIM. It is expected that Admission will become effective and that
dealings in the enlarged share capital, as described below, will commence at
8.00 a.m. on 29 December 2023.

Following Admission, the Company's enlarged issued ordinary share capital will
consist of 57,108,136 ordinary shares, with the right to one vote each. The
Company will hold no ordinary shares in treasury. Therefore, the total number
of ordinary shares and voting rights in the Company will be 57,108,136. With
effect from Admission, this figure may be used by shareholders in the Company
as the denominator for the calculations by which they will determine if they
are required to notify their interest in, or a change to their interest in,
the share capital of the Company under the Financial Conduct Authority's
Disclosure Guidance and Transparency Rules.

PDMR shareholdings

Following Admission, the interests of James Menzies (Chairman SE Asia) and
Pierre Eliet (Director SE Asia) in the issued share capital of the Company
will be as follows:

                As at 21 December 2023                                                                                               Immediately following Admission
 Name           Number of Existing Ordinary Shares held  Percentage of Existing Ordinary Shares held  Number of ConsiderationShares  Number of ordinary shares held  Percentage of Enlarged Share Capital held
 James Menzies  101,137                                  0.18%                                        220,735                        321,872                         0.56%
 Pierre Eliet   -                                        -                                            220,735                        220,735                         0.39%

 

The information contained within this announcement is not considered to be
inside information prior to its release.

Ends

 Enquiries:
 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

 

 Company Background

 Longboat Energy was established at the end of 2019 to create a full-cycle
 E&P company through value accretive M&A and near-field exploration.
 Longboat's initial focus has been in Norway where the Company has drilled
 eight exploration wells resulting in five hydrocarbon discoveries,
 representing a technical 63% success rate.

 In July 2023, Longboat completed a transaction with Japan Petroleum
 Exploration Co., Ltd ("JAPEX") to form a new joint venture company in Norway
 named Longboat JAPEX Norge AS. Under these arrangements, JAPEX will make a
 cash investment of up to US$50 million, of which US$16 million was paid on
 completion, for a 49.9% shareholding in of Longboat JAPEX Norge AS and provide
 the Joint Venture with a US$100 million Acquisition Financing Facility to
 finance acquisitions and associated development costs. Longboat retains 50.1%
 ownership in Longboat JAPEX Norge AS.

 Also in July 2023, Longboat JAPEX Norge AS announced its first production
 acquisition in Norway of interests in the Statfjord satellite fields,
 Statfjord Øst and Sygna.

 Longboat entered Malaysia in February 2023 through the award of a Production
 Sharing Contract for Block 2A, offshore Sarawak. Block 2A covers approx.
 12,000km(2) and is located in water depths of between 100-1,400 metres where a
 number of large prospects across multiple plays have been identified, with
 significant volume potential representing multiple trillions of cubic feet of
 gas.

 Longboat's activities remain focused on creating a portfolio with a clear
 low-cost route to monetisation and low-carbon drilling and development
 opportunities, well aligned to Longboat's ESG targets which includes a
 corporate 'Net Zero' on a Scope 1 and 2 basis by 2050.

 

Company Background

 

Longboat Energy was established at the end of 2019 to create a full-cycle
E&P company through value accretive M&A and near-field exploration.
Longboat's initial focus has been in Norway where the Company has drilled
eight exploration wells resulting in five hydrocarbon discoveries,
representing a technical 63% success rate.

 

In July 2023, Longboat completed a transaction with Japan Petroleum
Exploration Co., Ltd ("JAPEX") to form a new joint venture company in Norway
named Longboat JAPEX Norge AS. Under these arrangements, JAPEX will make a
cash investment of up to US$50 million, of which US$16 million was paid on
completion, for a 49.9% shareholding in of Longboat JAPEX Norge AS and provide
the Joint Venture with a US$100 million Acquisition Financing Facility to
finance acquisitions and associated development costs. Longboat retains 50.1%
ownership in Longboat JAPEX Norge AS.

 

Also in July 2023, Longboat JAPEX Norge AS announced its first production
acquisition in Norway of interests in the Statfjord satellite fields,
Statfjord Øst and Sygna.

 

Longboat entered Malaysia in February 2023 through the award of a Production
Sharing Contract for Block 2A, offshore Sarawak. Block 2A covers approx.
12,000km(2) and is located in water depths of between 100-1,400 metres where a
number of large prospects across multiple plays have been identified, with
significant volume potential representing multiple trillions of cubic feet of
gas.

 

Longboat's activities remain focused on creating a portfolio with a clear
low-cost route to monetisation and low-carbon drilling and development
opportunities, well aligned to Longboat's ESG targets which includes a
corporate 'Net Zero' on a Scope 1 and 2 basis by 2050.

 

 

 

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