TIDMLBE
RNS Number : 6726I
Longboat Energy PLC
16 August 2021
16 August 2021
Longboat Energy plc
("Longboat Energy", "Longboat" or the "Company")
Farm-in completion 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 announce that Norway's Ministry
of Petroleum and Energy has approved the Company's acquisition of
various exploration licence interests announced on 1 June 2021 (the
"Farm-Ins").
The Company is thereby qualified as a licence holder on the
Norwegian Continental Shelf ("NCS") and subject to the finalisation
of the usual completion procedures with the various counterparties,
expects to complete the Farm-Ins on 1 September 2021.
The drilling of the Egyptian Vulture prospect, scheduled to
commence later this month, will be the first of an anticipated
seven well exploration programme which will be drilled by Longboat
over the next 18 months on the NCS.
The drilling programme will be targeting net mean prospective
resource potential of 104MMboe (1) with additional 220 MMboe (1) of
upside and follow-on prospectivity. The programme has the potential
to create a Net Asset Value of over $1 billion based on precedent
transactions on the NCS for development assets.
More details on Egyptian Vulture and Longboat's seven well
exploration drilling programme can be found on the Company's
website: www.longboatenergy.com .
The Farm-Ins constitute a reverse takeover transaction pursuant
to the AIM Rules and as such the Ordinary Shares of Longboat will
be cancelled from trading on the AIM market of the London Stock
Exchange ("AIM") on completion of the Farm-Ins. Re-admission is
expected to occur shortly thereafter. An application for
readmission of the Company's entire ordinary share capital to AIM
will be made shortly. On Completion of the reverse takeover, the
Company will cease to be an investing company for the purposes of
the AIM Rules and will become an operating company instead.
Helge Hammer, Chief Executive of Longboat, commented:
" We are pleased to announce this milestone for Longboat which
sees us join a select group of companies holding oil and gas assets
on the Norwegian continental shelf and will enable us to complete
the Farm-In transactions as planned.
"We are looking forward to spudding the first well in our
multi-well programme later this month and will be updating
shareholders on its progress in due course."
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
Notes :
1 ERC Equipoise estimates, using a conversion factor of 5,600
scf/stb
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 Pre-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.
Standard
Estimates of reserves and resources have been prepared in
accordance with the June 2018 Petroleum Resources Management System
("PRMS") as the standard for classification and reporting with an
effective date of 31 December 2020.
Glossary
"GCOS" geological chance of success
"MMboe" Million barrels of oil equivalent
"NCS" Norwegian Continental Shelf
"Prospective Resources" those quantities of petroleum which are
estimated, on a given date, to be potentially
recoverable from undiscovered accumulations
"scf" standard cubic feet
"stb" stock tank barrels
For the purposes of UK MAR, the person responsible for arranging
for the release of this announcement on behalf of Longboat is
Julian Riddick, Company Secretary.
The information on contained within this announcement is
considered to be inside information prior to its release, as
defined in Article 7 of the Market Abuse Regulation No. 596/2014
which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018 ("UK MAR").
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END
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