TIDMLBE
RNS Number : 4069G
Longboat Energy PLC
26 July 2021
26 July 2021
Longboat Energy plc
("Longboat Energy", "Longboat" or the "Company")
Operational Update
Longboat Energy, the emerging full-cycle North Sea E&P
company with a portfolio of significant, near-term, low-risk
exploration assets, is pleased to provide an operational
update.
Egyptian Vulture Exploration Well
Longboat has been informed by the operator, Equinor ASA, that
the Egyptian Vulture prospect (Longboat working interest: 15%) is
on-track to spud in late August 2021 using the West Hercules
semi-submersible drilling rig.
The well is targeting gross mean prospective resources of
103mmboe(1) with further potential upside to bring the total to
208mmboe(1) . The Geological Chance of Success associated with this
prospect is 25%(1) with the key risk being related to reservoir
quality/thickness.
The well is expected to take up to 4 weeks to drill with a
pre-carry net cost to Longboat of c.$5 million (c.$1m post tax).
Upon success, there is the potential to provide low-CO(2) blending
gas to the nearby Equinor operated infrastructure (Åsgard) allowing
for the possibility of rapid monetisation.
Egyptian Vulture is an Upper Cretaceous turbidite play bounded
within a regional graben located in the prolific Halten-Dønna
Terrace. The prospect has been significantly de-risked by a strong
AVO anomaly analogous to the large Hades discovery made by Faroe
Petroleum in 2018 along with several other nearby Cretaceous
discoveries also made by the Longboat management team (Solberg,
Rodriguez, T-Rex).
Extensive Exploration Programme
Egyptian Vulture marks the first of an anticipated seven well
exploration programme which will be drilled by Longboat over the
next 18 months on the Norwegian Continental Shelf ("NCS") targeting
net mean prospective resource potential of 104MMboe (1) with
additional 220 MMboe (1) of upside and follow-on prospectivity.
The drilling programme has the potential to create a Net Asset
Value of over $1 billion based on precedent transactions on the NCS
for development assets.
The next well in the programme is scheduled to commence in
mid-September and will target the Rodhette prospect (Company 20%)
using the deep water Scarabeo 8 semi-submersible drilling rig .
This is a proven Jurassic Play in the Hammerfest Basin with a
potential 30km tie-back distance to the Goliat Field for early
potential monetisation.
The full list of the licenses, working interests and resource
estimates are set out in the background notes below.
Completion Process and Qualification
Longboat is pleased to report that the process for seeking
qualification as a licence holder of oil and gas assets on the NCS
is progressing well with the required interviews completed with the
NPD and PSA. Once approved, this would see Longboat become only one
of 38 companies licenced to hold oil and gas assets on the NCS
versus over 130 companies licenced in the UK.
The Company currently expects to complete the acquisitions
before 30 September 2021 but notes that this remains subject to
Norwegian government approvals. The process does not impact the
timing of or Longboat's participation in the Egyptian Vulture and
Rodhette exploration wells.
New Business Opportunities
The announcement of the initial farm-ins and successful equity
raise has significantly increased the industry's interest and
confidence in partnering with Longboat. The Company intends to
capitalise on this momentum to continue to pursue value accretive
acquisitions in line with its strategy to build a full-cycle
E&P company focused on the North Sea.
The Company will release further announcements as and when
appropriate. More details on Egyptian Vulture and Longboat's seven
well exploration drilling programme can be found on the Company's
newly updated website : www.longboatenergy.com .
Helge Hammer, Chief Executive of Longboat, commented:
" We are excited at the prospect of drilling our first
exploration well and can now look forward to a busy period of
almost continuous drilling and frequent value catalysts during the
next 18 months with a combined upside value potential in excess of
$1 billion.
" Exploration activity in Norway is picking up and during the
first six months of 2021, a total of 17 exploration wells have been
completed, resulting in eight discoveries. On Egyptian Vulture we
are partnering with one of the most successful explorers on the NCS
and a successful well could add more than 15 million boe of net
contingent resources with significant monetisation
opportunities.
"Our plan remains to build Longboat in to a full-cycle, North
Sea E&P company. We believe the momentum built by the initial
acquisitions will enable us to take advantage of the increasing
number of opportunities we are seeing in the market."
The information contained within this announcement is not
considered to be inside information prior to its release.
Notes :
1 ERC Equipoise estimates, using a conversion factor of 5,600
scf/stb
Ends
Enquiries:
Longboat Energy
Helge Hammer, Chief Executive Officer via FTI
Jon Cooper, Chief Financial Officer
Nick Ingrassia, Corporate Development
Director
Stifel Nicolaus Europe Limited (Nominated Adviser and Broker)
Callum Stewart Tel: +44 20 7710 7600
Jason Grossman
Simon Mensley
Ashton Clanfield
FTI Consulting (PR adviser)
Ben Brewerton Tel: +44 20 3727 1000
Ntobeko Chidavaenzi longboatenergy@fticonsulting.com
Background
Longboat Energy was established by the ex-Faroe Petroleum plc
("Faroe") management team to create a full-cycle North Sea E&P
company through value accretive M&A and low-risk, near-field
exploration. The management team has a proven track record of
delivering value to shareholders through exploration success,
accretive acquisitions and farm-ins, and a demonstrated ability to
monetise discoveries through sales and asset swaps. At Faroe, the
team grew reserves from 19 MMboe to 98 MMboe between 2013 and 2018,
a compounded annual growth rate of approximately 39%. The team
monetised numerous assets through development and active portfolio
management, including asset swaps and sell downs. Faroe Petroleum
was sold to DNO ASA in January 2019, providing a Total Shareholder
Return of 129% to investors from the previous equity fundraise.
The Company has created a hand-picked portfolio and material
drilling programme, including seven attractive exploration wells
over the next 18 months and further appraisal drilling likely on
success.
The full list of the licences, working interests and resource
estimates are detailed below:
Licence Prospect Longboat Gross Attributable Geological Expected
Working Prospective Chance P re-tax Drilling
Interest Resources of Success(2) Well Cost Date(3)
(MMboe)(1) Gross/Net
($million)(3)
--------------- --------- ------------------- -------------- --------------
Equinor
Egyptian
PL939 Vulture 15 % 103 25% $31/5 Aug-21
---------- --------------- --------- ------------------- -------------- -------------- -----------
PL901 Rødhette 20 % 41 41% $35/7 Sep-21
---------- --------------- --------- ------------------- -------------- -------------- -----------
PL1060 Ginny 9 % 41 27% $25/2 Q3-21
---------- --------------- --------- ------------------- -------------- -------------- -----------
PL1060 Hermine 9% 27 22% incl above Q3-21
---------- --------------- --------- ------------------- -------------- -------------- -----------
PL906 Mugnetind 20 % 24 51% $33/7 Q4-21
---------- --------------- --------- ------------------- -------------- -------------- -----------
PL1049(4) Cambozola 5 % 159 15% $64/16 Q2-22
---------- --------------- --------- ------------------- -------------- -------------- -----------
PL1017 Copernicus 10% 254 26% $38/4 Q2/3-22
---------- --------------- --------- ------------------- -------------- -------------- -----------
Spirit
PL1049(4) Cambozola 20 % 159 15% $64/16 Q2-22
---------- --------------- --------- ------------------- -------------- -------------- -----------
Idemitsu
PL293B Kveikje 10% 36 55% $31/3 Q4-21
---------- --------------- --------- ------------------- -------------- -------------- -----------
Source: ERC Equipoise Competent Persons Report. The geological
chance of success (GCOS) is an estimate of the probability that
drilling the prospect would result in a discovery as defined
under SPE PRMS. In the case of Prospective Resources, there is
no certainty that hydrocarbons will be discovered, nor if discovered
will it be commercially viable to produce any portion of the
resources.
Notes :
1 ERC Equipoise estimates, using a conversion factor of 5,600
scf/stb
2 ERC Equipoise estimates
3 Longboat management/operator estimates
4 Transaction also includes the extension licence PL1049B
Review by Qualified Person
The technical information in this release has been reviewed by
Helge Hammer, Chief Executive Officer, who is a qualified person
for the purposes of the AIM Guidance Note for Mining, Oil and Gas
Companies. Mr Hammer is a petroleum engineer with more than 30
years' experience in the oil and gas industry. He holds a degree in
Petroleum Engineering from NTH University in Trondheim and an MSc
in Economics from the Institut Français du Pétrole in Paris.
Glossary
"CO(2) " carbon dioxide
"MMboe" Million barrels of oil equivalent
"NCS" Norwegian Continental Shelf
"NPD" Norwegian Petroleum Directorate
"P10" the quantity for which there is a 10% probability
that the quantities actually recovered will
equal or exceed the estimate
"Prospective Resources" those quantities of petroleum which are
estimated, on a given date, to be potentially
recoverable from undiscovered accumulations
"PSA" Petroleum Safety Authority
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END
UPDDZGZNGVGGMZG
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