REG - Longboat Energy PLC - Farm-down of two exploration licences in Norway

Longboat EnergyAnnouncement

08/12/2023 07:00

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RNS Number : 0874W  Longboat Energy PLC  08 December 2023

Longboat Energy plc

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

Farm-down of two exploration licences in Norway

 

London, 8 December 2023 - Longboat Energy, an emerging full-cycle E&P
company active in Norway and Malaysia, is pleased to announce that Longboat
JAPEX Norge AS ("Longboat JAPEX") has farmed down two exploration licences on
the Norwegian Continental Shelf ("NCS") through an agreement with Concedo AS
("Concedo").

 

Summary

·      In PL1182S, the Company has farmed down from 30% to 15% in return
for a full carry of the  Lotus exploration well, up to an agreed cap above
the dry well budget, which is expected to spud in Q3 2024

·      In PL1049 which contains the Jasmine and Sjøkreps prospects,
Longboat JAPEX has farmed down from 40% to 25% in return for Concedo carrying
15% of the Company's 2024 exploration expenditure

Lotus exploration well (Company currently 30%)

 

Licence PL1182S lies in the prolific Northern North Sea, 4 km southeast of the
Company's recent significant Kveikje discovery where Longboat JAPEX is a 10%
equity partner.

 

The Lotus prospect (also named the Kjøttkake prospect by the licence
operator) is comprised of Palaeocene injectite sandstones, characterised by
excellent reservoir properties, and is supported by seismic amplitudes.
Longboat JAPEX exploited its significant knowledge of injectite reservoirs,
which are also the main reservoir in the Kveikje discovery, to secure the
Lotus prospect in last year's APA 2022 licencing round.

 

Based on the internal estimates, Lotus contains gross mean prospective
resources of 27 mmboe* with further potential upside estimated at 44 mmboe*.
The chance of success is 54%* with the key risk being hydrocarbon retention.

 

If successful, Lotus/Kjøttkake is likely to form part of an area cluster
development together with Kveikje and several other recent discoveries in the
area, through infrastructure associated with the nearby giant Troll field.

 

The Lotus prospect will be drilled using the semi-submersible Deepsea Yantai
and is expected to be drilled during Q3 2024. The licence partnership includes
DNO Norge AS (40%, op) and Aker BP ASA (30%).

 

PL1049 Jasmine and Sjøkreps (Company currently 40%)

 

Longboat Energy Norge initially held 25% in PL1049 where the deep Cambozola
prospects was drilled in 2022. The target for further exploration in the
licence is the shallower levels and the licence has been stratigraphically
split.  Two prospects have been mapped, Sjøkreps and Jasmine, both targeting
Tertiary plays. The area is covered with new modern high quality seismic data
and combined with new processing techniques, there is significant potential to
de-risk the exploration prospects.

 

Sjøkreps is a fault-bounded three-way dip closure at Palaeocene level and has
preliminary estimated recoverable volumes ranging between 20 to 300 mmboe**
(P90-P10) with the main risk being presence and quality of reservoir.

The Jasmine prospect is an injectite target at Eocene level, which is
analogous to the Kveikje discovery, and has recoverable volume range
preliminarily estimated between 10 to 30 mmboe*** (P90-P10) with the main risk
being reservoir presence and quality.

The work programme consists of seismic studies, potential seismic reprocessing
and integration of results from ongoing and near-term wells targeting the same
interval in the area, which combined have the potential to significantly
improve the Chances of Success ahead of making a drill decision. The potential
drilling decision has to be made by February 2025.

 

Helge Hammer, Chief Executive of Longboat, commented:

"We are pleased to announce the successful farm down of the two Norwegian
exploration licences and the full carry of the Lotus exploration well cost,
which is in line with our strategy to retain exposure to high quality
exploration wells but at minimum use of the Company's equity capital, and we
remain fully focussed on delivering on our plans to grow production and
reserves in high quality assets in Norway and in SE Asia."

The information contained within this announcement is 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 Market 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

 

 * Resource figures and chance of success estimates on Lotus are from Longboat
 JAPEX's APA2022 application.

 ** Operator estimate

 *** LJN estimate

 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.

 

 

* Resource figures and chance of success estimates on Lotus are from Longboat
JAPEX's APA2022 application.

** Operator estimate

*** LJN estimate

 

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.

 

Concedo Background

 

Concedo is a private Norwegian oil company focusing on exploration on the
Norwegian Continental Shelf. In June 2023, Concedo announced the acquisition
by Attica Exploration AS a newly formed private entity backed by Lundin family
members.

 

 

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 with an effective date of 31 December 2020.

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 Master's Degree from Faculty of Applied Earth Sciences at the
Norwegian University of Science and Technology in Trondheim.

Glossary

 "mmboe"                  Million barrels of oil equivalent
 "NCS"                    Norwegian Continental Shelf
 "Prospective Resources"  those quantities of petroleum which are estimated, on a given date, to be
                          potentially recoverable from undiscovered accumulations

 

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