Longboat Energy Share Discussion Threads

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So what do we make the this note from December now, has all this superseded by the recent news?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

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[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.

[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