SE Asia Acquisition and Expansion

Seascape Energy Asia

13/09/2023 07:00

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RNS Number : 2284M  Longboat Energy PLC  13 September 2023

13 September 2023

 
Longboat Energy
plc

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

 

SE Asia Acquisition and Expansion

 

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

 

Highlights

·    Topaz's sole asset is a 15.75% working interest in Block 2A, offshore
Sarawak Malaysia, containing the giant 'Kertang' prospect

·    Following completion of the transaction, Longboat will hold an
operated 52.5% interest in Block 2A, simplifying the process towards a
positive well decision and the potential introduction of an additional funding
partner prior to drilling

·    The Topaz team, comprised of James Menzies and Pierre Eliet, will
join Longboat Energy, bringing extensive regional expertise and an established
network, accelerating Longboat's ambitions to build a full cycle E&P
business in SE Asia

·    The transaction consideration closely aligns the Topaz team with
value delivery from Block 2A

Helge Hammer, Chief Executive of Longboat Energy, commented:

"We are pleased to have increased our interest in the extensive and
prospective Block 2A in deep water Sarawak, which contains the giant Kertang
prospect. Sarawak has seen significant exploration success in recent years,
and we are excited to play a role in the quest for additional gas resources in
the area.

 

"We welcome James and Pierre to Longboat. Their extensive experience and
network from SE Asia combined with our in-house technical expertise, puts us
in a strong position to deliver accelerated growth in the region. In parallel
with maturing Block 2A towards the drilling decision, we focus on adding
production and development assets to our portfolio in SE Asia."

 

Presentation

 

Longboat Energy intends to host a presentation via the Investor Meet Company
platform.

 

The online presentation will take place Friday 15 September 2023, 10.00am BST,
and is open to all existing and potential shareholders. If you wish to attend
the online presentation you should register for the event in advance via this
link:

 

https://www.investormeetcompany.com/longboat-energy-plc/register-investor
(https://www.investormeetcompany.com/longboat-energy-plc/register-investor)

 

Shareholders registered to attend are invited to pre-submit questions online
via the Investor Meet Company dashboard up until 9.00am BST on Friday
September 2023 or at any time during the live presentation. A recording will
be made available on the Investor Meet Company platform after the
presentation.

 

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 100km2 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.

 

Having worked closely with Topaz and its owners over the past twelve months on
Block 2A and other acquisition opportunities, Longboat has 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.

 

James Menzies has over 30 years of oil & gas industry experience in a
broad range of roles, from technical practitioner to senior executive. James
has served as Chief Executive Officer of Coro Energy plc (2018-2021) and
Executive Chairman at TAP Oil (2016-2018). James was a Senior Partner at
Lambert Energy Advisory from 2001-2005, prior to founding Salamander Energy
plc, a SE Asian-focussed E&P business where he served as Chief Executive
Officer from 2005-2015. James spent much of his career at LASMO plc, as a
Geophysicist in the UK North Sea, Vietnam and Indonesia, as well as general
management roles in Corporate Strategy, Investor Relations and Mergers &
Acquisitions. He graduated with an MSc in Geophysics and Planetary Physics
from University of Newcastle Upon Tyne in 1988 and has a BSc (Hons) in Geology
from London University. James is also a Non-Executive Director of Trinity
Exploration & Production plc.

 

Pierre Eliet has over 25 years of experience working in upstream organic and
inorganic growth projects with extensive experience in South-East Asia.
Pierre, who is resident in Kuala Lumpur, worked with Lundin Energy and Roc Oil
with oversight of subsurface projects and growth across both Groups' Asian
portfolios of assets.  He served as Technical and Business Development
Director SE Asia for Lundin and as GM - Exploration, Geoscience & Business
Development for Roc Oil & Director ROC Oil Malaysia. Pierre also
previously worked at TOTAL and Cairn Energy in the United Kingdom, India and
on new venture projects globally.  Over his time at Cairn Energy Pierre was
closely associated with the discovery of the Cairn Rajasthan fields in India,
and specifically the flagship Mangala field.  Pierre holds a BA in Earth
Science from Trinity College in Dublin (1991), a PhD in Geology from
Manchester University (1995) and certified IDP-C, INSEAD's (International
Director's Programme, 2022).

 

Transaction Detail

 

Longboat has 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 (the "Acquisition"). As a result, the Company will now
control 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 consideration for the Acquisition will be satisfied in three tranches:

 

·    an initial issue of new ordinary shares of 10 pence each in the
Company ("Ordinary Shares") equivalent to US$100,000; upon completion of the
Acquisition;

·    an contingent 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 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.

 

The Company believes that an equity position of this size will accelerate the
drilling of the Kertang prospect by simplifying the process towards a positive
well decision and the potential introduction of an additional funding partner
prior to drilling.

 

The Acquisition remains subject to customary regulatory and partner approvals.

 

Under the terms of their employment, James Menzies and Pierre Eliet are
incentivised to deliver production acquisitions in SE Asia within the next two
years.

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 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.

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.

 

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

 

 

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