Longboat Energy Share Discussion Threads

[sogoesit] 29/2/2024 11:08

"... turn a profit"?

Early stage Resources companies tend to be Asset Value plays first (NAV) and only turn to Earnings plays once production generates profits. Since management intend this company to be "Full Cycle" E&P it's going to get a bit mixed as to what metrics, and how, to value the company. Asset by asset value or production profit generation?
There are also points, right now I think, where Asset Values are discounted to zero until they are proven from "first hydrocarbons". But, if they re-invest profits into new capital projects it gets even murkier.

I guess, when you say "turn a profit" you are looking at production stage with relatively substantial free cash flow (i.e. no/little internal capital re-investment or asset holdings farmed-down to carries pre-capital investment)?

It will be interesting to see how they manage capital allocation as we(I) don't have a clue right now; does anyone?

[danmart2] 28/2/2024 18:26

But until management prove they can turn a profit I am holding off buying any more

[zengas] 28/2/2024 12:27

Nothing to do with leaks imo but the fact of the assets it has added as well as the super deal with Japex in Norway and that investors are waking up to. It is and was very oversold plus the low available free float which i highlighted.

The M/cap at 25p is £14m m/cap and is a producer on it's existing assets which will soon have paid for itself as well as expecting to double production on those.

It has $100m of available Japex funding for acquisitions in Norway. Use some of that for Norwegian production acquisitions (expected) and will further transform the company.

It has also underestimated play opening discoveries in Norway with major partners.

It has a world class exploration block off Sarawak with multiple large prospects.

The block has 6,000 km2 3D seismic which would cost a fortune to replicate and at least $20m - or more than the current m/cap.

Kertang is a world class 1.5 billion boe recoverable estimate (9 TCF) drill ready prospect DHIs, gas cloud, significant methane measurements.

Two smaller adjacent prospects about half the size each may add 6 TCF to this so imo a target potential of 15 TCF.

Those 3 are covered by 2900 km2 3D.

Farming down from 52.5% to 15-20 % could yield $ 1billion of value.

57m now or expanded to 100m shares at £4 = £400m/$500m

With still further structures.

Also intending to pick up producing assets in that region seperate to Norway.

By comparrison - Upland (UPL) in the same Malaysian region, no production, financial backing, no 3D and unknown stake in a PSC block not even awarded yet, no recoverable estimates and nothing else of value on 1.2 billion shares and todays share price of 3.3p (recently 4 and 5p) = £40m m/cap and nothing else to underpin an entry price.

Fair starting value for LBE would and should be 40p which is only £22.5m and on the above looking for north of 100p from Norway in growth (ie barely £60m) and a potential future target as above of value on a success case on Kertang detailed above.

[sogoesit] 28/2/2024 12:20

Well, if it is... Zengas needs to post more... ;-)) (for science you understand)!

It's not a good idea, in my view, to think about "leaks" in the oil industry... like BP's in the GoM!!

[danmart2] 28/2/2024 12:18

No news, leaky ship?

[katsy] 28/2/2024 10:46

Is this all off the back of ZENGAS post. Anyway still has a very very low market cap.

[ripvanwinkle3] 28/2/2024 10:31

Will it be news of Norway or Malaysia first?

[trader465] 28/2/2024 10:27

A leak of what?

[jailbird] 28/2/2024 10:21

Def a leak

[danmart2] 27/2/2024 09:41

ZENGAS,
Thanks for the info

[zengas] 26/2/2024 14:21

Okea AS went ahead and completed their acquisition from Equinor in the Statfjord Unit as well as Statfjord Ost, Nord and Sygna.

'The Statfjord Area comprises the Statfjord Unit, Statfjord Øst Unit, Statfjord Nord and Sygna Unit. The Statfjord Unit development covers the Statfjord A, B and C concrete gravity-based platforms. The other fields are subsea developments tied back to the main field platforms.

Statfjord Area is one of the largest fields on the NCS in terms of initial oil in place which was in excess of 6 billion barrels. Statfjord A was put on production in 1979, followed by Statfjord B in 1982 and Statfjord C in 1985. The field is operated by Equinor and the Field Life extension (FLX) unit was established in 2020 with an ambition to deliver 200% increase in remaining reserves, 25% cost reduction and 50% CO2 reduction in the Statfjord Area by 2030. The FLX unit focuses on safe operations, improving recovery from the field as well as reducing costs and CO2 emissions and has a strong track record of deliveries in recent years.'

As LBE partners Equinor, VAR, DNO etc most of the existing discoveries made are close to existing facilities and some of those at the lower end of the threshold may yet come on to the development stage or swap in the future, but that is where all these companies have a major focus similar to the details in the Equinor transcript.

[zengas] 26/2/2024 14:15

Equinor Transcript 7/2/24 Capital Markets day.


Kjetil Hove Equinor ASA - EVP of Exploration & Production Norway

" In addition to the large sanctioned project portfolio, we have an even larger number of non-sanctioned projects. We have more than 30 projects that we are maturing towards investment decisions in the coming years. The projects are in an early maturation phase, but we expect an average breakeven of the portfolio of around $35 per barrel and a payback time of around 1.5 years. For many of the new subsea tieback fields, we are looking into new ways of working to reduce the maturation and execution time with 50% and the cost level of at least 30%.

This will reduce the breakeven from these fields with 30% compared to a more standard subsea development. And this will be done through new technologies such as the Cap-X subsea wells and by taking out portfolio synergies. These projects will give us around 350,000 barrels in production after 2030

In addition to the large sanctioned and non-sanctioned project portfolio, we are working hard to increase the recovery factor from our fields. Historically, we have been, since sanctioning, been able to increase the average recovery factor from around 30% to around 50% from our oil fields. And there is still a large remaining potential in our fields, and we plan to deliver 50 to 70 increased recovery wells annually in this decade.

Many of these wells are using new technologies such as retrofit multilateral wells, multi-stage fracking and advanced completion solutions, reducing the cost and increasing the production. And these are highly profitable barrels with a breakeven of around $20 per barrel and a payback time less than a year.

We're also planning for around 300 interventions annually to increase production from our existing wells. And in addition, for many of our late life assets, we are planning to sanction low-pressure projects to reduce the reservoir pressure and thereby increasing the recovery from our fields. This increased recovery effort will give us an annual production of around 150,000 towards 2035

Our exploration strategy is that around 80% of the exploration wells will be drilled close to the infrastructure in known exploration plays. This is normally low-risk exploration with high probability of success. And new discoveries can be put on stream quickly since they will require limited new infrastructure.

The remaining 20% of the exploration wells will be drilled in new plays, still quite close to our infrastructure. These are higher potential wells but with somewhat higher risk than the pure infrastructure-led exploration targets. These wells can open new plays also in known areas such as the Kveikje, Heisenberg and Norma discoveries during the last years. Discoveries that you may not have heard about, but you should not underestimate them because there are many of them, and these could open new plays with large potential on the NCS.

The key driver for our view on the potential on the Norwegian continental shelf is the investments that we have made in new exploration seismic the last 5 years. This is seismic with fit-for-purpose technologies that reveals potential that we did not see on our legacy seismic. "

Hege Skryseth Equinor ASA - EVP of Technology, Digital & Innovation

"Good afternoon, everyone. It's a pleasure to be here. We are now rescanning our core areas on the NCS, all over again for remaining resources. A very good example is the Troll area where we have 500 million barrels proven with a significant upside potential. This equals to a full year of NCS production. We identify opportunities that were not visible to us before. And this we do due to: first, over the past 2 years, we have invested $200 million in new high-quality exploration seismic. With technologies like Ocean bottom and Topseis, both representing a step change in image quality. And this is on top of the 70 petabytes, which is a huge number of legacy seismic and well data that we already have.

Second, to significantly increase insight and speed, we have developed AI-based technologies using deep learning algorithms. These recognize complex patterns in pictures, sound waves and other data sets. What used to take weeks, now take hours.

Third, by combining this with the unique confidence that we have on the NCS, we see that mature areas are still very prospective. We are targeting all core areas of the NCS, such as Sleipner and Johan Castberg. For these 2 alone, we have identified 37 high-quality leads and prospects."

[katsy] 26/2/2024 12:22

Did they get that tax return from the Norwegian government? They were a little coy about that question a few months back.

[someuwin] 26/2/2024 12:18

All buys so far today.

[bumpa33] 23/2/2024 08:24

No offer at 20 this morning, well bid at 19.65 100k

[someuwin] 22/2/2024 10:11

Looks like chart bottomed last year and is now starting the ascent.

[basem1] 22/2/2024 08:33

Decided last night lol

[basem1] 22/2/2024 08:32

I sold 60k at 21.2 on the last spike and decided I needed back in a few seconds after 8

[jailbird] 22/2/2024 08:26

Something has leaked here?
decent volume buyers since yesterday

[bomber13] 21/2/2024 18:11

Thanks Zengas and Darcon for your excellent narrative here .
Offshore Norway has been a reasonably slow burn so far , and the first bite of producing assets may have cost a tad more than expected , but the pace , execution and delivery will undoubtedly pick up speed now with Japex’s cheque book .
As for offshore Malaysia , the market has not even twigged yet at either the size of the prize or the quality of the people .

[chutes01] 21/2/2024 16:38

good stuff, adding.

[zengas] 21/2/2024 16:32

Just for you Chutes. The share price is no reflection of the current assets and easy, very easy to be downbeat at any point in time on any stock.

I remember it being a painfully slow burn so to speak at Sterling waiting for the asset injection which happened with the new strategy in May 21 and a rename. Could have been picked up at 8.5p Dec 19 and 14.5p in late 21 - now 41p and only the start for more acquisitions.

Likewise look at Serica 43p in March 2012 and could have been picked up in the 3p range Jan - April 2015 and at 5p to Sept that year.

90p Jan 2018. 57p 6 months later end of June.

140p range Feb 2019 - Jan 2020.

150p+ mid 2021

420p early 2022 retreating to 245p May 2022..

Averaged 240p for 2023.

Jan 2024 220p to it's current 178p.

12/6/22 - 'Britain's savviest investment couple are sitting on shares worth more than £80million after good news last week from Serica Energy. David and Debbie Hardy, who run a Midlands building firm, are the largest shareholders in the North Sea energy producer. Serica's shares to £2.90, sending the value of the Hardys' 10.4 per cent soaring to £82million. David, 63, and Debbie, 58, bought into the business for as little as 3p a share.'



I see someone perhaps equally canny has bought and increased to 4m here or 7% up from 6% back in October.

We have the first Norwegian albeit small production assets/reserves with a ramp up in production as wells come on line this quarter.

More to come since the new strategy announced and the legacy discoveries also injected into the JV.

$100m funding from Japex for the Norwegian JV since it was set up in the last 9 months with the Japanese govt as a major investor in Japex.

On the 2nd front (Malaysia.) An asset in Block 2A with 9 TCF estimated mid case recoverable in one prospect alone (multiple prospects) added in the last 9 months which has the potential for $1b of value creation even on a 20% post farmout retention and has some $20m+ of 3D spend. As evidenced by the valuation given to the Sapura-OMV JV last month by Total Energies takeover posted above.

More Malaysian/S.E Asia assets to come.

£11m m/cap at 18.75p.

PIs happy to pay 4p last few months at UPL valuing it at £48m on nothing else other than an unknown stake in an unawarded Sarawak block with very limited 2D and zero 3D.

Like i said, it depends on your entry point relative to the strength/potential of all new and upcoming assets under the new strategy.

[chutes01] 21/2/2024 16:12

Go on then ...

[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.