TIDMLBE
RNS Number : 7804L
Longboat Energy PLC
15 September 2021
15 September 2021
Longboat Energy plc
("Longboat Energy", "Longboat" or the "Company")
Spud of Rødhette Exploration Well and 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 announce the spudding of the
Rødhette exploration well and to provide a further operational
update.
Highlights
-- Drilling commenced at Rødhette (Company 20%), Longboat's
first exploration well
-- Further two wells, Egyptian Vulture (Company 15%) and Mugnetind
(Company 20%), expected to commence drilling by the end of
September
-- Drilling at Ginny/Hermine (Company 9%) expected to commence
in December
-- Rig confirmed for Kveikje and Cambozola wells, to be drilled
in 2022
-- Copernicus well site survey to be acquired shortly, to facilitate
2022 drilling, following well commitment decision
-- Executive team further strengthened through additional ex-Faroe
appointment of Hilde Salthe as Managing Director, Norway
Rødhette exploration well spud
The drilling of the Rødhette prospect (Company 20%) has
commenced using the deep water Scarabeo 8 semi-submersible drilling
rig . This is a proven Jurassic play in the Hammerfest Basin with
the potential for early monetisation through a 30km tie-back to the
Goliat Field.
The well, operated by Vår Energi, is expected to take up to six
weeks to drill with an estimated pre-carry net cost to Longboat of
c.$7 million (c.$1.5 million post tax).
The Rødhette prospect is estimated to contain gross mean
prospective resources of 41 mmboe with further potential upside to
bring the total to 81 mmboe. The chance of success associated with
this prospect is 41% with the key risk being related to fault seal
and oil column thickness.
Drilling schedule 2021
The following three additional near-term wells are scheduled for
drilling in 2021:
Drilling of the Egyptian Vulture prospect (Company 15%) is
expected to commence towards the end of September using the West
Hercules semi-submersible drilling rig, which is on a long-term
contract with the operator, Equinor. The Egyptian Vulture well is
targeting gross mean prospective resources of 103 mmboe with
further potential upside to bring the total to 208 mmboe on a gross
basis. The chance of success associated with this prospect is 25%
with the key risk being related to reservoir quality and
thickness.
Drilling of the Mugnetind prospect (Company 20%) is also
scheduled to commence at the end of September using the Maersk
Integrator jack-up drilling rig. The Mugnetind prospect, operated
by AkerBP, is estimated to contain gross mean prospective resources
of 24 mmboe with further potential upside estimated at 47 mmboe on
a gross basis. The chance of success associated with the Mugnetind
prospect is 51% with the key risks being reservoir
presence/quality.
Drilling of the dual-target Ginny and Hermine prospects (Company
9%) is now scheduled to commence in December 2021, u sing the West
Hercules semi-submersible drilling rig operated by Equinor. These
prospects have a combined target gross mean prospective resource of
68 mmboe with further potential upside estimated at 129 mmboe on a
gross basis. The chance of success associated with these prospects
are 27% and 22%, respectively, with the key risk being related to
fault seal and phase risk.
2022 Drilling Programme
Longboat is pleased to confirm further details of its 2022
exploration drilling programme which will see the Company
participate in three additional wells.
The Company has recently been informed by Equinor, the operator,
that the Deep Sea Stavanger semi-submersible drilling rig has been
contracted to drill the Kveikje (Company 10%) and Cambozola
(Company 25%) exploration wells in H1 2022.
Kveikje is a low-risk, Paleocene injectite play located near the
Fram infrastructure offering opportunities for rapid
commercialisation. Cambozola is a significant, play-opening well
located near some of the largest fields on the Norwegian
Continental Shelf. Further details about both wells, including size
and chance of success, can be found on the Company's website.
Additionally, following the well commitment made on Copernicus
(Company 10%) at the end of August, the acquisition of a site
survey is anticipated to be acquired shortly which will facilitate
the drilling of an exploration well during 2022 by operator
PGNiG.
Appointment of Managing Director Norway
Longboat is pleased to announce that Ms Hilde Salthe will be
joining the Company as Managing Director Norway on 1 October 2021,
further strengthening the Company's executive team as it
transitions to a full-cycle E&P business. Ms Salthe, a
petroleum geologist by background, has over 20 years' industry
experience with Shell, Statoil (Equinor), Talisman and Paladin. Ms
Salthe was a key member of the Faroe technical team from 2008 until
2019 when the business was acquired by DNO ASA. Most recently, Ms
Salthe was the Subsurface Manager of DNO's North Sea Business Unit.
Ms Salthe has a Masters Degree from Norwegian University of Science
and Technology, Trondheim.
The full list of the licenses, working interests and resource
estimates are set out in the background notes below.
The Company will release further announcements as and when
appropriate. More details on 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:
"Following the successful completion of our first transactions
at the end of last month, I am pleased that we are already under
way with exploration drilling. Rødhette is the first of three
wells, which we expect will begin drilling over the next few weeks
in an extremely busy and exciting time for the Company. The wells
have the potential to create significant shareholder value.
"The exploration programme over the next 18 months offers
shareholders a unique opportunity to gain exposure to a drilling
portfolio of seven wells targeting net mean prospective resource
potential of 104MMboe (1) with an additional 220 MMboe (1) of
upside which provides the potential to create a Net Asset Value of
over $1 billion based on precedent transactions in the Norwegian
North Sea for development assets."
The information contained within this announcement is not
considered to be inside information prior to its release.
Notes :
All resource figures and chance of success estimates are from
the ERC Equipoise Competent Person Report and using a gas-to-barrel
of oil equivalent 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 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
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.
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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