Longboat Energy Share Discussion Threads

[zengas] 02/2/2024 15:21

Darcon, I wasn't talking about leaks, my point was ie no body knew thoese deals were coming at a spcific time and likewise neither will they know the size or timing/date of the next ones.

When you weigh it up they've landed assets and deals that on their own are potentially transformational in the making regardless of what's next to come given the funding agreement.

[darcon] 02/2/2024 15:18

Those who knew about the Japex JV beforehand weren't able to trade and looking at the LBE share price chart there wasn't any material movement to the upside before LBE announced the deal.

The LBE team are professionals with prior public company experience so understand their public company obligations and so I wouldn't expect to see evidence of any leaks from them or their advisers.

[zengas] 02/2/2024 15:17

Seperately this has to be one of the biggest assets landed for a company of this size - ie Block 2A (not counting the hunt for other Asian production assets).

To have 52.5% of a 12,000 km2 block of this size with over 6,000 km2 of 3D seismic not to mention 17,500 km lines of 2D is phenomenal.

The cost to carry out that amount of seismic would run into the tens of $millions alone along with the extensive geochemistry work confirming very high concentrations of methane and low CO2. That can't be understated.

At about 17 mins into the interview James Menzies says they beleive there could be in excess of 9 TCF recoverable for Kertang.

At 18:30 he states that 'there are multiple structures surrounding Kertang that are also extremely big - it's just that they are dwarfed by this giant.'

When you refer back to the Topaz slides particularly page 6 you can see '3 main identified prospects' which includes Kertang. The two other structures are in very close proximity to Kertang with the other 2 combined having an area roughly the size of Kertang itself. All 3 are covered by 2,900 km2 of 3D seismic.

Given the analogue description to the smaller 6 TCF Kasawari field - taking into account the 3 main structures, there could well be potential for 15+ TCF recoverable here.

Retaining 10-20% post farmout would be potentially huge given a ready gas market.

Not since Cove acquired 8.5% offshore Rovuma from struggling Artumas in 2009 has there been an opportunity as big imo.

Their share price was 9p in 2009. If you were patient, Dolmens Brian Gallagher called it a speculative buy on tues 9th March 2010 and a target of 59p.

By the time Shell had bid in Feb 2012 there was an estimated 20+ tcf recoverable estimated. Shell bid $1.8b while PTTEP of Thailand pipped them with a $1.9b takeout at 240p post tax.

Coves 8.5% share of 20-30 TCF = 1.7 - 2.55 TCF.

Reataining 10-20% of block 2A for LBE could mean on the 3 prospects covered by 3D, there might be 1.5 - 3 TCF net to play for here irrespective of all other assets.

[chutes01] 02/2/2024 15:09

getting cheaper here, heading to 15p

[zengas] 02/2/2024 15:08

So did anyone know beforehand exactly when the JAPEX JV was coming 2/5/23 - (9 months ago) ?

or the first production assets on 3/7/23 ?.

Likwise nobody will know until the next announcement when the current assets under review are agreed upon and announced to the market.

Japex did not get involved for fun. They have to be mutually agreed assets and there is a sizeable pot of $100m which can effectively be doubled through debt or RBL lending. With a 5 year window and for the ability of assets to be potentially paid down in 2-3 years from the effective transaction date, we could be looking at $3-400m available in total 2 years on.

[ripvanwinkle3] 02/2/2024 15:01

One or two people losing patience and selling out or reducing can have a significant impact on the share price here, as we have seen before. Works both ways.
News on larger JAPEX acquisitions could come at any time.
I hope the company are considering dividends when they do get production up, as o&g share prices seem destined to underperform, so regular payments to shareholders may be needed to get them to stick around.

[darcon] 02/2/2024 14:58

My thoughts:

"1) a significant increase in production at Sygna and Statfjord Øst early in the year when all wells will be brought on stream (we assume 600 boe/d net to Longboat Norge)"

- They're currently producing 370 boepd net to LBE, but they're still in the process of ramping up in Q1 so we wait to see if they'll reach that 600 boepd target and then what their forward guidance will be. Hopefully we don't have to wait longer than end of this Q, but possibly longer (Q2?) as they haven't mentioned a target date for issuing that guidance. LBE stated: "Longboat anticipates a significant increase in production during the first quarter of 2024 and production guidance will be provided following the ramp-up of the new production wells."

"(2) high impact drilling at Lotus (Norway)" - that's happening in Q3 2024 and LBE farmed-out so dilutive to LBE's direct % interest in that asset (reduced from 30% to 15%) and so reduces exposure and cash outgoings for the PLC's equity with a cap agreed "above the dry well budget"


"(3) progress in farming out the giant Kertang prospect in Malaysia" - we're waiting. Their dissemination of the slide deck on 31st Jan shows there is some marketing happening. I hope they'll update us once they initiate their formal farm-down process, but also possible they could do something bilaterally with a counterparty without announcing and surprise us all

"(4) potentially the acquisition of producing/development assets in Norway and/or South East Asia" - they said in their latest RNS that they're working on something. They can't really say more than that until they're ready to sign the deal with the counterparty/ies

I remain optimistic. They have shown they can do good transformational deals (eg, the JV with Japex), but these take time to do. So we have to be patient.

[jailbird] 02/2/2024 14:19

So what do we make the this note from December now, has all this superseded by the recent news?

This is why take these notes with a pinch of salt.



Auctus's Friday update on LBE:

"Longboat Energy (LBE LN)C; target price of £0.60 per share: All eyes on 2024 – With the acquisition of interests in Sygna and Statfjord Øst expected to complete in January, the process to establish a stable well-funded producing business in Norway is almost complete. FY23 production at Sygna and Statfjord Øst net to Longboat Norge is ~250 boe/d. The acquisition of 49.9% of Longboat Norge by JAPEX in 2023 provides low cost capital and access to a strong balance sheet to develop further the Kveikje area and make acquisitions at no further dilution to Longboat plc. With the entry in Malaysia and the acquisition of Topaz, 2024 is expected to be an important year with (1) a significant increase in production at Sygna and Statfjord Øst early in the year when all wells will be brought on stream (we assume 600 boe/d net to Longboat Norge), (2) high impact drilling at Lotus (Norway), (3) progress in farming out the giant Kertang prospect in Malaysia and (4) potentially the acquisition of producing/development assets in Norway and/or South East Asia. We understand that Longboat is actively pursuing opportunities with multiple counterparties. We understand that Longboat is already in discussions with multiple counterparties."

[sogoesit] 02/2/2024 11:47

Oil and Gas needs patience unless you're punting a well or two.
5 years at least for this one, maybe 3 if we're lucky. But very few long term growth investors in UK.
(GRQ schemes demand a lot of hard work... haha! But I'm sure punters are very succesfull. Who knows?)
To the detriment of the market, as is evident, imv.

As Jesse Livermore said: "Money is made by sitting, not trading."
Take your pick.

[danmart2] 01/2/2024 16:35

Not a bad update, just not very fast moving in terms of progress and bring in income

[chutes01] 01/2/2024 16:31

All for £11M though

[darcon] 01/2/2024 16:24

And of course the prospective elephant in the room is the Kertang prospect and its eventual farm down prior to drilling and the other hunting for deals that they're doing in Malaysia and perhaps elsewhere in SE Asia...

[ohisay] 01/2/2024 16:24

Today I skimmed off 100k because progress in Norway has been slower than I expected and Malaysia is going to be Q2 at best/
Still have a very large position here after all that.

[darcon] 01/2/2024 16:22

When LBE originally announced the production assets deal in July 2023 they were anticipating a doubling of production following the infill drilling work on those assets. Today's RNS shows they're about 23.3% above the original 300boepd base, which while positive is still a little way off. There have apparently been some delays and that has cost the company in negative working capital resulting in a higher draw on the Japex facility. So perhaps some have sold because of some disappointment with that as well as the timelines you mention.

The Japex facility is described as a "bridge" in today's RNS. So maybe once LBE have firmed up their production guidance and updated the reserves statement they'll be able to go to a third party bank to get a reserve based loan to replace the Japex bridge facility. My speculative guess is that any bank will want to do something more sizeable so I would guess they'll wait until LBE close some other financing deals with the bridge before bundling them up into a broader reserve based lending facility with a third party bank. But if they could get something in place sooner with a third party bank then that would be welcome.

There are decisions upcoming on Rodhette and Kveikje according to their licence obligations in February 2024.

LBE's operations page mentions a Kvinand prospect in relation to their Kveikje licence: "The Kveikje license also contains the Kvinand prospect which is currently being evaluated as a possible drilling target. Kvinand is interpreted as a fault bounded Jurassic trap and has been mapped as the possible northern extension of the Carmen discovery made by PL1149 partners in July 2023." So perhaps we will learn something about that in due course.

LBE's operations page in relation to their Rodhette licence mentions that "The recent large Lupa gas discovery announced by Vår on the 23rd December 2022 could have positive impact on Rødhette and a future gas export route in the area."

And in today's RNS they state that they're working on other material production acquisitions: "We are now focused on adding further assets to our portfolio to build a full cycle E&P company with material production interests." So I think there's stuff happening in the background and there will be more favourable news in due course, but it's understandable that some may sell without a clear timeline given for that.

[katsy] 01/2/2024 15:25

That's not the reaction I was expecting to today's news. I guess this is AIM and when people see timelines of multiple quarters/years rather than weeks, people move on.

[darcon] 01/2/2024 07:12

Well done LBE on getting those deals completed.

It’s good to see that the Japex facility can be accessed for deals. Now that they’ve established a procedure and precedent for doing so the next time ought to be more efficient.

Please keep those production deals coming.

[sogoesit] 31/1/2024 11:48

Someone else (substantial) needs to operate, indeed for the first well also, given the potential liabilities so a farm-down is inevitable.
I don't think Japex has an (Outside Japan) operatorship track record so it would likely be a larger (independent/multi-national) company with deep water experience.

Anyway, impressive Seismic... but 5 years down the road for value unless they farm-down for cash or carry. It's a long game.

[bomber13] 31/1/2024 09:44

It is certainly very encouraging to see Petronas wheeling out their senior general manager of resource exploration to present alongside Longboat's two representatives . Furthermore , slide 5 in the presentation shows two prolific analogues to Kertang , both of which Petronas is heavily involved with .

Might Petronas want operatorship and control of Block 2A I wonder ?

[darcon] 31/1/2024 07:22

The company background section of that RNS states:

“… Longboat JAPEX Norge AS holds interests in six discoveries on the Norwegian Continental Shelf and has a 4.80% interest in Statfjord Øst and 4.32% unitised interest in Sygna producing fields.”

The Norwegian Offshore Directorate’s factpages still show Impex Idemitsu as the owner of those 4.80% and 4.32% interests so perhaps they’ve jumped the gun on including that info in their RNS or perhaps completion has/is happening today and the NOD’s website requires updating.

[darcon] 31/1/2024 07:17

RNS:

PRESENTATION:

[danmart2] 30/1/2024 20:57

Expected LBE to be providing the markets with regular news from October 23 onwards , hopefully shareholders will get some positive news in Feb

[ohisay] 30/1/2024 12:12

Anybody interested ?
LBE obviously not just content with Kertang ...



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This is a varied role that will allow you to use your analytical skills in many different ways, including to:

- Evaluate existing portfolio and potential acquisitions from an economic and commercial standpoint.
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[darcon] 23/1/2024 13:32

Rodhette (licence 901, LBE holds 20% and the operator is VAR Energi ASA with 50%)

On the fact pages for licence 901 of the Norwegian Offshore Directorate's website it says that there is an ongoing work obligation involving a "(BoK) Decision to concretize" by 10 February 2024.



The exploration well on Rodhette was partially successful insofar as it made a discovery in October 2021:

But as LBE's RNS of 11 October 2021 pointed out the discovery of between 9 and 12 mmboe recoverable (gross) was "at the lower end of pre-drill expectations..."

So it will be interesting to see whether or not LBE following the decision to concretise are able to reveal any further info on "additional prospectivity in the area" and/or whether there remains any commercial development potential or whether that decision to concretise will result in the licence being in due course surrendered like the licence in respect of the minor discovery at Egyptian Vulture.

----------------------
[EDIT - text below added to this post on 29/01/24]

On the operations pages of LBE's website the following is stated about the Rodhette prospect (as at 29 Jan 2024):

"The Rødhette Discovery in licence PL901 in the Barents Sea with exploration well 7122/6-3 S was announced in October 2021. The well encountered hydrocarbons in the primary target in the Middle Jurassic Stø Formation. The top of the reservoir was reached close to prognosis at a vertical depth of 1,847 meters below sea level with 29 meters of high net-to-gross, moderate to good quality sandstone. Data acquired indicated a gas column of approximately 18 meters in the well over an oil rim with a likely oil-water contact at 1,876 meters true vertical depth.

Press released preliminary estimates by the operator (Vår) placed the size of the discovery between 9 and 12 mmboe recoverable (gross). The Rødhette volumes were at the lower end of pre-drill expectations and assessment of both existing discoveries and additional prospectivity in the area is needed to understand the commercial development potential. The well was drilled 30 km north of the Goliat field and 5 km south from the Tornerose discovery. The recent large Lupa gas discovery announced by Vår on the 23rd December 2022 could have positive impact on Rødhette and a future gas export route in the area."



-----------------------

Link to a press article from December 2022 about Var's Lupa gas discovery and which may have a postive impact on Rodhette and a future gas export route in the area:

[ripvanwinkle3] 23/1/2024 11:40

Well said Darcon, and please keep us informed of your research findings, no matter how 'non-material'.

I find the nearby very large Carmen discovery interesting, and the comments from Longboat that it is likely to extend into the Kveikje licence area. Hopefully they will make an announcement about that when further assessment has been completed.

[darcon] 23/1/2024 11:33

ripvanwinkle3 - I agree. Completion of their existing production deal, signing of another production deal utilising the $100m Japex facility and/or a farm-down of the Kertang prospect in Malaysia are what I'm really hoping for as positive share price catalysts.

But while we're waiting for THAT bigger news I'm slowly trawling through the NOD's website to identify what might be some of the other things with regard to their existing licences and sharing the info of what I find. Sometimes putting together the pieces of non-material publicly available information can reveal a picture of progress or otherwise.

They do keep mentioning Kveikje and the area cluster development concept from time to time in their announcements. How will that "decision to concretise" fit into their progress on that? Currently I don't know.