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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Longboat Energy Plc | LBE | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| 0.50 | 3.08% | 16.75 | 15:53:50 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 16.25 | 16.25 | 16.75 | 16.75 | 16.25 |
| Industry Sector |
|---|
| OIL & GAS PRODUCERS |
| Top Posts |
|---|
Posted at 11/4/2024 10:09 by darcon LBE announced the Statfjord Satellites acquisition on 3 July 2023. LBE said then that with the planned in-fill drilling production was anticipated to double in 2024 to ~600 boepd net to LBE Norge.LBE said the anticipated payback on the transaction was under two years. The transaction also brought tax benefits to LBE and an additional $4m payment. Subsequently some doubts about the likely success of the in-fill drilling were raised when OKEA postponed the close of its earlier announced Statfjord acquisition from Equinor. However, OKEA ultimately chose to proceed with its acquisition and it subsequently completed at the end of 2023 and it now holds 14%. As at 1 Feb 2024 LBE/Japex's net production at the Statfjord Satellites was ~370boepd and we were still waiting to see the results of the production ramp-up. Uncertainty remained as to whether the operator would be successful in doubling production as predicted and LBE had walked down the production expectation from doubling to a significant increase. So I think today's announcement confirming that production has indeed been successfully doubled is fantastic news. I'm very pleased with that. However, the news about cost inflation and cost overruns also shows the risk of being a small non-operator in such assets. Not much LBE/Japex can do post-acquisition if the project cost overruns or difficulties arise because of conditions deep underground that require more money to be spent. |
Posted at 05/4/2024 12:01 by darcon There was an interesting webcast from ENQ. They're looking at expanding their Malaysian and SE Asian international operations, which they view positively. Their CFO is ex-Salamander. So are several of LBE's team and LBE also have a similar view on the growth potential in that geography...UPL still talking about getting a PSC and their MCAP is valued at [more than] twice LBE's - go figure? LBE already hold a majority stake in a large multi-TCF prospective one and the news on its farm-out when it happens will be material (hopefully in a good way). We're waiting on news about the increased production from the in-fill drilling on the recently acquired production acreage in Norway. We're waiting on news on an accretive M&A deal...what deal(s) are they working on and with whom? |
Posted at 02/2/2024 14:58 by darcon 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/developmen 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. |
Posted at 01/2/2024 16:22 by darcon 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. |
Posted at 23/1/2024 13:32 by darcon 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: |
Posted at 22/1/2024 13:03 by darcon On 17 Jan 2024 LBE updated us on the Statfjord satellites acquisition:"The fifth and final of the new infill wells in Statfjord Øst redevelopment has now been successfully drilled and the Statfjord Øst and Sygna fields are expected to start ramping up production during Q1 2024. The transaction is progressing towards completion, which is expected at the end of this month." They have previously mentioned tapping the Japex facility for the purposes of financing this transaction. So it will be very interesting to see if they are able to do that. Completion of the Statfjord acquisition will trigger a US$4m contingent payment previously agreed with Japex to LBE's Norwegian subsidiary in which Japex is now a co-shareholder. On 23 Nov 2023 LBE updated us as follows on the Statfjord satellites acquisition: "· The fourth of five new infill wells in Statfjord Øst has now been successfully drilled. · Overall, project execution is on track with the Statfjord Øst and Sygna fields expected to be fully on stream from all wells early in the new year. · The transaction is progressing towards completion, which is expected in in January. On 3 July 2023 , Longboat announced that it had signed a sale and purchase agreement with INPEX Idemitsu to acquire a 9.60% interest in PL 089, equating to a 4.80% unitised interest in the Statfjord Øst Unit and a 4.32% unitised interest in the Sygna Unit, for cash consideration of US$12.75 million. Statfjord Øst is located seven kilometres to the northeast of the Statfjord field in a maximum water depth of 190 metres and produces oil and gas from two subsea production templates and one water injection template tied-back to the Statfjord C platform. The Norwegian Ministry of Petroleum and Energy approved a redevelopment plan in 2021 to drill five new production wells into potentially undrained areas of the field while also adding gas-lift to increase production levels. Initial production for 2023 is estimated to be around 250 boepd net to Longboat JAPEX, which is slightly lower than anticipated mainly due to a delay in bringing the new wells on stream. Production is expected to increase significantly early in 2024 when all wells will be brought on stream. Gas-lift installation is completed. The Statfjord Øst Unit partners are Equinor Energy AS (43.25%, op), Petoro AS (30.00%), Vår Energi ASA (20.55%), INPEX Idemitsu Norge AS (4.80%) and Wintershall Dea Norge AS (1.40%). The Sygna Unit partners are Equinor Energy AS (43.425%, op), Petoro AS (30.00%), Vår Energi ASA (20.995%), INPEX Idemitsu Norge AS (4.32%) and Wintershall Dea Norge AS (1.26%)." Hopefully LBE will do an investor meet company presentation after they've successfully completed the above transaction. |
Posted at 17/1/2024 14:17 by darcon chutes01 - I agree. The headline value of the Japex debt facility available to the JV is $100m but who is to say that if the LBE/Japex team found a bigger and more lucrative deal that they wouldn't be able to raise additional initial debt finance through Japex. I think there is the potential for the market to be positively surprised by LBE's deal-making.The LBE team now combine two O&G teams (ex-Faroe & ex-Salamander) and their inclusion in their recent presentation slide about the exit values on those companies speaks of their longer-term ambition for LBE. Obviously plenty of risks remain. At the level of the PLC it's under-capitalised so they need to tread carefully and avoid mistakes. |
Posted at 17/1/2024 14:09 by darcon someuwin - yes. It's the nature of exploration. LBE's discovery hit rate has actually been better than 1/3 to date. They've been unlucky in terms of the sizes of what they've discovered (Velocette being the most recent example), but the Japex deal and LBE's recent farm-down to Concedo show that other industry parties value LBE's O&G expertise.One could ask why did Equinor and DNO partner up with LBE on this acreage and not go it alone without LBE? I think the answer is that LBE are adding value to the exploration effort as a result of their experience of injective reservoirs gained through the Kveikje discovery. The initial work programme on Magnolia is low-cost. It consists of the acquisition and/or reprocessing of modern 3D seismic and G&G studies. They'll have a drill or drop decision in one year's time. On deciding to enter the next phase they'll have two years to drill an exploration well. LBE may yet be able to farm-down part of their interest in Magnolia in order to be free carried on their effort. Magnolia, if successful, could be part of a wider cluster development. Lots of little pools can make a lot of economic sense if tied together and jointly developed as an area cluster development together with Kveikje and other nearby discoveries in the area. In my view it makes perfect sense for LBE to take steps to enhance the value of their Kveikje position by taking positions in neighbouring acreage. In Kveikje LBE holds a 10% interest and in Kjottkake/Lotus LBE have farmed-down from 30% to 15%. So a 20% initial stake does give room for LBE to subsequently farm-down a portion. |
Posted at 12/1/2024 12:52 by darcon LBE's transaction with Inpex Idemitsu in respect of 4.80% of the Statfjord Ost Unit and 4.32% of the Sygna unit was announced on 3 July 2023 and has yet to be completed. LBE's transaction was targeted for completion by the end of 2023, but the deadline has obviously slipped. LBE's transaction announcement came after OKEA's announcement on 20 March 2023 of its acquisition from Equinor of ~14% stakes in these same units (On 30 November 2023 OKEA announced a postponement of its transaction with Equinor. On 23 November 2023 LBE announced that "initial production "is slightly lower than anticipated mainly due to a delay in bringing new wells on stream" - perhaps a hint at the issue affecting OKEA's transaction with Equinor. Okea at the end of December nevertheless completed their acquisition of the ~14% stakes from Equinor in the Statfjord and Sygna Units: See also the info available on the regulator's fact pages on the two units: Statfjord unit: Sygna unit: Currently Inpex Idemitsu is still shown as a part owner of these two units. As may be seen from OKEA's 29 Dec 23 press release they were able to negotiate a deferral of part of their purchase consideration to Equinor as OKEA argued that there were some reductions in the fair value OKEA ascribed to the assets they acquired as a result of inflation and a 10-15% reduction in volumes over the lifetime of the acquired assets. LBE in its 3rd July 23 press release stated that they anticipated profits associated with the transaction to be GBP5.6million as a result of unlocking "material tax synergies". |
Posted at 21/12/2023 12:09 by darcon It's nice to see LBE finally announce completion of their Topaz acquisition today.Today's RNS confirms that LBE "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." - Great! In layman speak bring on that farm-down process! I hope that will happen relatively soon. I would hope they've made additional progress since September when they first announced the Topaz acquisition on fine-tuning where they're going to drill, estimates on how much it's all going to cost, etc. As we saw in the webinars and presentations by LBE the Topaz team almost immediately became part of LBE's SE Asian team following announcement of their Topaz acquisition in September. Today's closing was a legal formality. They're now completely incentivised and aligned within LBE's equity structure which also means one less external party (and their lawyers) to negotiate with about introducing LBE's funding partner. Petroleum Economist reported in October: "Shell owns neighbouring Block 3 and [Helge Hammer] said any development of Kertang would benefit from Sarawak’s existing gas pipeline and LNG export infrastructure, particularly as the latter requires fresh sources of feed gas. Longboat and its partners have two-and-a-half years remaining on the licence to carry out further studies. Technical work is underway, and Hammer suggested next year could see the planned farm-down of Longboat’s stake, plus a commitment to develop, followed by drilling in 2025, “although the process could take longer”." |
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