TIDMLBE
RNS Number : 3074K
Longboat Energy PLC
01 September 2021
1 September 2021
Longboat Energy plc
("Longboat Energy", "Longboat" or the "Company")
Completion of Farm-Ins to High Impact Drilling Programme
Longboat Energy, the emerging full-cycle North Sea E&P
company with a portfolio of significant, near-term, low-risk
exploration assets on the Norwegian Continental Shelf ("NCS"), is
pleased to announce the completion of the farm-ins with Equinor,
Idemitsu and Spirit announced on 1 June 2021.
Following updates from the licence operators, the Company now
expects to complete the drilling of four exploration wells in its
seven well programme before the end of 2021. The wells now
scheduled to drill during 2021 are: Egyptian Vulture (Company 15%),
Rødhette (Company 20%), Mugnetind (Company 20%) and Ginny/Hermine
(Company 9% ). The programme is anticipated to commence during
September and a further operational update will follow to coincide
with the spudding of the first well.
The Company is also pleased to confirm that Copernicus (Company
10%), the seventh exploration well in its programme, is now a firm
commitment following a recent notification to the Norwegian
authorities by the joint venture partners, Equinor and PIGNiG.
Copernicus is anticipated to drill in 2022 and lies on the Utgard
High in the Vøring Basin region of the Norwegian Sea and the
prospect is a combination trap with mapped stratigraphic pinch out
down-dip and a small structural component at the apex.
The Copernicus prospect is estimated to contain gross mean
prospective resources of 254mmboe(1) with further potential upside
to bring the total to 471mmboe(1) . The chance of success
associated with the Copernicus prospect is 26%(1) with the key
risks being reservoir presence/quality and trap.
More details on Longboat's seven well exploration drilling
programme can be found on the Company's newly updated website:
www.longboatenergy.com .
Potential tax changes
The Company notes the announcement made yesterday by the
Government and the Ministry of Finance of proposals for potential
changes to the Norwegian petroleum taxation system from 2022.
A consultation paper with further detail of the proposals will
be published by the Ministry of Finance next week. Any changes will
be subject to industry consultation and Parliamentary debate and
approval prior to any potential implementation.
Longboat's current understanding of the proposals which may be
of relevance to the Company can be summarised as follows:
-- The total marginal tax rate remains the same at 78 per cent;
-- The Company would still receive the tax value of exploration
costs (to the extent these generate tax losses) refunded
in cash at the revised special tax base (71.8 per cent),
but the remaining corporation tax element (6.2 per cent)
would be carried forward to be set off against future profits
from production; and
-- There are no changes proposed to the temporary tax regime
introduced in 2020 and effective until the end of 2021.
The Company will continue to benefit from the bi-monthly
negative tax installments for its four-well exploration drilling
campaign this year which is anticipated to commence during
September 2021, the first installment of which was received in
August 2021.
Longboat will continue to monitor the situation and will provide
further analysis of the implications of the proposals once more
details are available.
Supplementary Admission Document
The Company will today publish a Supplementary Admission
Document as required by Rule 3 of the AIM Rules. The Supplementary
Admission Document will be available to view on the Company's
website at www.longboatenergy.com .
Admission and Total Voting Rights
As the Farm-Ins constitute a reverse takeover under Rule 14 of
AIM Rules, it is expected that the Ordinary Shares of Longboat will
be cancelled from trading on the AIM market of the London Stock
Exchange ("AIM") on 2 September 2021. An application has been made
for admission to AIM of the Company's entire 56,666,666 Ordinary
Shares, and this is expected to occur with dealings commencing at
8:00 am on 2 September 2021 under the existing TIDM code " LBE"
("Admission"). On Admission, the Company will cease to be an
investing company and will instead become an operating company for
the purposes of the AIM Rules.
Following Admission, this number of 56,666,666 may be used by
shareholders as the denominator for the calculation by which they
may determine if they are required to notify their interest in, or
change to their interest in, the Company under the FCA's Disclosure
Guidance and Transparency Rules.
Helge Hammer, Chief Executive of Longboat, commented:
"We are pleased that the Farm-Ins have completed and we are now
operational, with Longboat about to embark upon the drilling of
four wells over the next few months in an extremely busy and
exciting time for the Company.
"We welcome the notification that the drilling of the Copernicus
well is now a firm commitment for next year. This well is a play
opener offering very considerable prospectivity."
The information 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
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.
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.
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)
------------ --------- ------------------- -------------- ---------------
PL1017 Copernicus 10% 254 26% $38/4 Q2/3-22
-------- ------------ --------- ------------------- -------------- --------------- ----------
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
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
"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
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END
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