Longboat Energy Share Discussion Threads

[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.

[ripvanwinkle3] 23/1/2024 11:03

Darcon - Kveikje progress should be relative small fry following news of Norwegian production acquisition(s), which could come any day.

[darcon] 23/1/2024 10:41

Kveikje (licence 293, LBE holds 10% and Equinor is the operator)

On the fact pages for licence 293 CS of the Norwegian Offshore Directorate's website it shows that there is an ongoing work obligation involving the "study of geology and geophysics" with a deadline of 17 February 2024 for a "Decision to concretise".



The next stage following the decision to concretise are "conceptual studies", which are shown as "in process" and with an expiry date of 17.02.26. The expiry date for submitting the plan for development which is also shown as in process is 17.02.27.

[darcon] 22/1/2024 15:13

AIM Rules for Companies

11. An AIM company must issue notification without delay of any new developments which are not public knowledge concerning a change in:
♦ its financial condition;
♦ its sphere of activity;
♦ the performance of its business; or
♦ its expectation of its performance,
which, if made public, would be likely to lead to a substantial movement in the price of its AIM securities.
----------

Completion of the transaction would in my view be likely to lead to a substantial movement in the price of LBE's securities so I would be very surprised if they didn't disclose completion immediately. And I would be further surprised if LBE's Nomad didn't insist that LBE release such news immediately.

[trader465] 22/1/2024 14:56

Fair comment but I see completion “expected̶1;. Timelines are expected estimations of completion, not expected date for news, I would expect news a week or two after completion date. We wait.

[darcon] 22/1/2024 13:59

Middle of next week is Wednesday 31st January, which is the last day of "the end of this month.".

The transaction, being their first production acquisition, potentially involving the first drawdown under their $100m Japex facility and a trigger for the contingent $4m payment to their Norwegian subsidiary by Japex is material and ought to be announced straight away.

Looking at their past RNSs they don't hide news about closing of their acquisitions but announce straight away.

It could of course still slip by a few days so we could see an announcement in the first days of February. But they have stated now in two RNSs that they're gunning for completion of the transaction in January.

[trader465] 22/1/2024 13:39

“The transaction is progressing towards completion, which is expected at the end of this month”

Why this week? I would thought news by middle of February ish after the completion

[darcon] 22/1/2024 13:05

So we ought to expect news by the middle of next week.

[darcon] 22/1/2024 13:03

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.

[ohisay] 18/1/2024 15:27

Darcon thats quite important I think ..the ability to raise additional debt finance through the indirect relationship to Japex .
The CFO referred to it last year in an Investor Meet session ..he mentioned 'Mezzanine Finance 'as a real possibility.
What is that ?

To receive mezzanine financing, companies must typically have an established reputation, solid product offering, history of profitability and realistic growth plans.
Its an interesting dimension to LBE through Japex which is underappreciated IMV.

[chutes01] 17/1/2024 14:47

12m is a ridiculous valuation, so great upside near term also, I expect market to be excited by a larger prod deal in the offing.

[darcon] 17/1/2024 14:17

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.

[someuwin] 17/1/2024 14:11

Cheers Darcon - great answer.

[darcon] 17/1/2024 14:09

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.

[chutes01] 17/1/2024 13:59

the elephant in the room is not the drilling options or the smaller Statfjord deal
With the Japex cash injection there is a big prod deal coming
So many options to take a share of existing production buy-ins.

[someuwin] 17/1/2024 11:44

Does it really make financial sense going after such low odds prospects?

"The chance of success associated with the Magnolia prospect is 34%* with the key risk being hydrocarbon retention and phase."

[ohisay] 17/1/2024 09:25

Map of new license ..

[chutes01] 16/1/2024 17:08

further PA's likely very soon, adding barrels to the coffers each day $$

[darcon] 16/1/2024 16:48

So I expect we'll see an announcement tomorrow 7am from LBE about that APA licence award to their LBE Japex subsidiary and also providing us with further context about it. Is it most relevant to their Lotus prospect, their potential Kveikje appraisal/development and/or something else?

[darcon] 16/1/2024 16:39

It was announced today that 24 companies (including Longboat Japex) have been offered ownership interests in the APA 2023 licensing round:

The following map shows that Longboat Japex have been awarded a 20% ownership interest in licence 1212 S:

The other participants in that new licence 1212 S are Equinor (operator) (40%) and DNO (40%).

The following link shows the offers with work obligations:

[chutes01] 15/1/2024 15:32

rise to 25p this week, onwards to 30 plus

[jeanesy] 15/1/2024 10:44

tried to buy a few more but can't get more than just over 2000 shares !

[ohisay] 15/1/2024 09:45

FWIW..

Investors can look beyond the current market price with the aid of Morningstar's Fair Value Estimate, which guides them to a stock's long-term intrinsic value.
Morningstar determines its fair value estimate based on how much cash a company is projected to generate in the future.Daily calculations of Premium/Discount% compare the close price at the time of calculation to the Fair Value.

Fair value estimate

41.8869p
50% discount

Updated 09/01/2024

[darcon] 14/1/2024 23:39

Summary by Norwegian Offshore Directorate (NOD) of activity in Norway in 2023:

Here's a link to a presentation summarising the 2023 exploration activity on the Norwegian continental shelf:

Note that the largest discovery made in 2023 was DNO's Carmen discovery - see slide 12.

It's very likely that DNO's Carmen discovery extends into LBE's acreage. To what extent will become clearer in due course once LBE obtains more technical data through the NOD. A question to follow up on at LBE's next IMC webinar.