Longboat Energy PLC Market Update (0172G)
March 13 2020 - 3:00AM
UK Regulatory
TIDMLBE
RNS Number : 0172G
Longboat Energy PLC
13 March 2020
13 March 2020
Longboat Energy plc
("Longboat Energy", the "Company" or "Longboat")
Market Update
Longboat Energy, established by the former management team of
Faroe Petroleum plc to build a significant North Sea-focused
E&P business, provides an update to the market following recent
world and oil market events.
Strategy
Since Longboat was admitted to AIM on 28 November 2019, the
Directors' time and resources have been deployed in meeting the
Company's investment objective to create a full-cycle North Sea
E&P company, in order to deliver value to shareholders.
The Company aims to deliver value by applying the business model
of growing production and reserves through value creative M&A
combined with exploration. Longboat will focus on 'near field'
exploration with access to infrastructure and de-risking through
nearby discoveries.
Although this strategy remains unchanged the market dynamics
have altered significantly in recent days.
Financial Status
Longboat management has adopted the prudent financial approach
that served them well at Faroe Petroleum and has established a
flexible operation ensuring very low G&A running costs.
At the end of February 2020, Longboat Energy's cash balance was
GBP8,656,325 (unaudited). The Company's committed G&A costs are
running in the order of GBP125,000 per month and the uncommitted
G&A costs flex according to the level of activity, notably as
regards transaction analysis and the associated due diligence.
Outlook
Longboat has analysed multiple potential transactions since its
IPO, including a number of bilateral discussions, to acquire assets
consistent with the investment policies outlined in the prospectus.
So far none of the opportunities to date have resulted in a
transaction due to the Company remaining disciplined with regards
to the Company's underlying technical and macro-economic
assumptions (as was the case when at Faroe Petroleum).
During this period of current uncertainty, it is likely that
companies which are financially constrained may seek to dispose of
assets that Longboat will be able to consider opportunistically
alongside the various ongoing discussions. In addition, it is
likely that opportunities will arise out of distressed situations.
Any material transaction entered into would require the approval of
the Company's shareholders.
Helge Hammer, Chief Executive of Longboat, said:
"We believe that if the recent fall in the oil price is
sustained, it will provide an increasing number of material and
attractive opportunities. We have a robust bank balance, low
G&A, strong industry relationships and institutional support.
As such, we are well-placed to exploit existing as well as new
opportunities arising from falling oil prices. We expect
transaction valuations to decrease and thus potential returns to
shareholders to grow significantly."
Enquiries:
Longboat Energy via FTI
Helge Hammer, Chief Executive Officer
Jon Cooper, Chief Financial Officer
Stifel (Nomad) Tel: +44 20 7710 7600
Callum Stewart
Jason Grossman
Ashton Clanfield
FTI Consulting (PR adviser) Tel: +44 20 3727 1000
Ben Brewerton
Sara Powell longboatenergy@fticonsulting.com
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END
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