Longboat Energy Share Discussion Threads

[katsy] 21/2/2024 16:08

Even those who bought at £1 should see a profit if the numbers talked about by Zengas come true. Even £100m Mcap would be circa £2 per share, given all things equal.

[zengas] 21/2/2024 15:39

Depends where your entry point is as an investor so in that case some perhaps, but definitely not all.

[chutes01] 21/2/2024 13:19

All good stuff, but meanwhile investors sit underwater and look on
Go on then ...

[zengas] 21/2/2024 12:44

OMV seem to have gotten what they paid for the Sapura interest when the JV was formed in 2019 (9/11/18) on top of 5 years production income.

At the time Sapura had 260 mmboe 2P reserves and 2C resources. This went into the newly formed 50-50 Sapura/OMV JV ie 130 mmboe (or in gas around 0.8 TCF).
As OMVs Chairman (J Pleininger) said at the time - production trebled from 10,000 boepd at the time to around 36,000 boepd for the JV at the time of the present sale (Jan 2024) to Total Energies for $903m.

There has been significant production over the last 5 years. The large Jerun Gas field to start production later this year.

This from November 2018 -

'Sapura and OMV inked a joint venture (JV) agreement for the strategic partnership today, as a follow-up to a Heads of Agreement (HoA) signed between the two parties on Sept 12.

The deal entails OMV subscribing to 50% of the enlarged issued share capital of Sapura Upstream for US$540 million, and to repay US$350 million worth of shareholders’ loan owed by Sapura Upstream to Sapura Energy.

This marks a cash consideration of US$890 million to Sapura Energy.

OMV also agreed for an additional consideration worth US$55 million plus up to another US$30 million in contingency funds mainly linked to the resource volume in Block 30, Mexico at the time of taking the final investment decision.

Under the agreement, OMV will fully consolidate the JV company’s assets in its financial statements, which comprises 260 million barrels of oil equivalent (boe) in proven and probable (2P) and contingent (2C) reserves,

“Already right now, [the JV] has a great portfolio that is fit for growth. So what we are aiming for is to triple the production in the next two years from close to 10,000 boe/d currently to 30,000 boe/d in 2020,” said Pleininger.

[zengas] 21/2/2024 11:52

So our new head of exploration in Malaysia (Matthew Choo) has just joined LBE in the last month with a substantial track record.

Has just come from the Sapura-OMV joint venture after 5 years.

Before that over 5 years with Sapura.

Interesting that he was involved with SK310, SK408 and our own block 2C in the last decade which just never got drilled.

The Sapura-OMV JV was created in 2019 and OMV sold their 50% stake in the JV a few weeks ago for $900m.

TotalEnergies Signs an Agreement for the Acquisition of OMV’s Upstream Gas Assets in Malaysia

PARIS--(BUSINESS WIRE)--Jan. 31, 2024-- Regulatory News:

TotalEnergies (Paris:TTE) (LSE:TTE) (NYSE:TTE) has signed an agreement with OMV to acquire its 50% interest in Malaysian independent gas producer and operator SapuraOMV Upstream Sdn (SapuraOMV) for a consideration of $903 million (including the transfer of a $350 million loan granted by OMV to SapuraOMV), subject to customary closing adjustments.

SapuraOMV’s main assets are its 40% operated interest in block SK408 and 30% operated interest in block SK310, both located offshore Sarawak in Malaysia. In 2023, SapuraOMV’s operated production (100%) was about 500 Mcf/d of natural gas, feeding the Bintulu LNG plant operated by Petronas, as well as 7 kb/d of condensates. On block SK408, the development of the Jerun gas field is on track for startup in the second half of the year 2024



and

'Block SK 408 contains seven discoveries from eight wells drilled. Five of the seven are understood to be commercial, and three are in the development stage – Gorek, Larak and Bakong, which have resource sizes ranging from 0.5 Tcf to 1.5 Tcf.

The jewel in the crown in Block SK 408 is the 2016 Jerun gas discovery, which contains up to 3 Tcf.'



Basically that's a $900m sale of 20% in SK408 and 15% in SK310 equal to net production of around 18,000 boepd.

SK310 (B15 field) has produced about 68% of its reserves according to one energy report.

Are we talking about 1.2 - 2 tcf net sale ? There's also a small interest in a Mexican oil discovery of which they are a minority partner.

LBEs Block 2C with Kertang estimated at 9 TCF mid recoverable. Multiple other prospects and 2 are each half the size of Kertang and covered by 3D so perhaps 15 TCF and if 20% retained on farmout could mean 1.8 - 3 TCF net target.

[danmart2] 16/2/2024 17:18

Difference being LBE board have not achieved a lot, the jury is very much out, investors getting fed up

[darcon] 16/2/2024 11:16

Enquest yesterday issued their full year 2023 operations update (see: They stated they're going to "pivot [their] business to refocus on future growth during 2024" and "the Group is focused on [...] the pursuit of value-accretion and transformational production acquisitions, both in the North Sea and internationally."

Enquest (ENQ) have a sizeable producing Malaysian operation ( "In Malaysia production averaged 7,437 Boepd; 15% up on 2022, underpinned by strong operational performance (90% production uptime). Production also includes 604 Boepd associated with Seligi 1a gas (produced and handled by EnQuest on behalf of Petronas, in exchange for a gas handling and delivery fee)."

With the high tax rates / windfall tax in the UK it would seem logical that some of that ENQ future growth and value accretive and transformative production acquisition activity may be channelled towards Malaysia and/or elsewhere in SE Asia.


... which happens to be where LBE is also looking for value accretive production growth ...

[danmart2] 07/2/2024 15:34

That may be the case, I don’t have any more detail beyond what I have shared.
Let’s give them until the summer and then I will either move on or stay put.

[chutes01] 06/2/2024 23:11

several small deals and it just gets too messy, not what the market is looking for here after mediocre drilling success, with their backing they need to deal into 10kBbls/day stuff, then hope for success with drill bit.

[cashandcard] 06/2/2024 23:08

danmart2,Interesting. But what you indicate is exactly why the market is pretty cool on this one. Small % deals on some small-scale development are not going to change the dial for investors.Kertang however, well that is company making. Its the opportunity it offers.Cash

[ohisay] 06/2/2024 12:40

Really excellent article on Who's Who in Malaysia (by Robert Chambers).

[danmart2] 05/2/2024 14:51

They are negotiating on a deal in Norway (possibly more deals but I have been told about 1), not massive deal but positive

[danmart2] 04/2/2024 17:44

It’s all about the payback

[bomber13] 02/2/2024 17:54

Might this be the reason for the yawn in the Longboat shareprice in the last two days ?

Here is what was said on 3rd July , 2023 about the financing of the Statfjord Satellites acquisition . The transaction had a base cost of $12.75m , and an effective date of 1st January , 2023 -

" The Transaction and subsequent capital expenditures on the Statfjord Satellites will be funded by a combination of existing cash on hand in Longboat Norge and the pending investment by JAPEX, made up of the initial US$16 million base investment (less repayment of the intercompany loan to Longboat of approximately US$4.75 million) and the additional US$4 million contingent payment previously agreed with JAPEX which will be triggered by the Transaction. A portion of the US$100 million Acquisition Bridge Facility, provided by JAPEX in relation to its investment into Longboat Norge, is also available should it be needed. "

And here is what was said of the financing yesterday -

" The acquisition of the Statfjord Satellites has been funded by a combination of the investment by JAPEX into Longboat JAPEX announced last year and a drawing of approximately US$15 million on the Acquisition Bridge Facility provided by JAPEX to the Joint Venture. The drawing is greater than originally forecast due to negative working capital movements related to delays in bringing new wells on-stream during 2023."

[jailbird] 02/2/2024 16:17

Thks guys for your input here,
good reading

[someuwin] 02/2/2024 16:17

No buy quote available now.

[katsy] 02/2/2024 15:51

I should have some funds coming my way next week. Would like a top up at these prices so stop talking this up. It's a dog, nobody wants oil or gas anymore. What do Norwegians know about gas anyway. £10.6m Mcap for this dog, you're having a laugh

[darcon] 02/2/2024 15:35

Zengas - I agree with your points.

The Japex team have now been embedded within the LBE team for about 6 months. So I'd expect to see new Norwegian deal(s) being signed within the next 6 months.

I think it's a hugely positive sign that LBE were able to access the Japex facility. It proves that the finance is there and available. The positive statement about Japex's contribution in the RNS is also important to note in my view.

It's incredible that LBE were able to get their hands on that Kertang prospect. Very astute on their part.

[cashandcard] 02/2/2024 15:26

Great post Zengas. I am intrigued by Kertang exposure here. Gonna put some away in the ISA and SIPP with a bunch of Namibia (Orange basin) focussed smallcaps.Cash

[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.