Norwegian Portfolio Update and New Country Entry

RNS Number : 0034Q

Longboat Energy PLC

15 February 2023

 

15 February 2023

Longboat Energy plc 

("Longboat Energy", "Longboat" or the "Company")

Norwegian Portfolio Update and New Country Entry

Longboat Energy, the emerging full-cycle E&P company, is pleased to provide an operational update and to announce its entry into Malaysia.

Norwegian Portfolio

Norway remains Longboat's key focus area. Having made four potentially commercial discoveries in less than 18 months, the Company is now focussed on maturing these assets towards development and realising the value that has been created.

On 11 January 2023, the Company announced that it had been awarded the Lotus prospect (Longboat, 30%) in the Norwegian 2022 APA Licensing Round. Lotus is located immediately adjacent to Longboat's Kveikje discovery (Longboat, 10%) and adds significantly to the materiality of Longboat's acreage position in this area.

Kveikje and Lotus, on success, are likely to form part of the new Equinor operated Ring Vei Vest ("RVV") cluster development project. The RVV project will develop multiple oil discoveries made west of the Troll field in recent years. This includes the Rover Sør oil discovery announced last week by Equinor, which further increases the size of the multi-hundred-million-barrel RVV development project.

Following a short hiatus in anticipation of the APA award, Longboat is actively pursuing monetisation options for its position in the area. This process has attracted significant interest and Longboat anticipates being able to provide the market with a further update during the first quarter of 2023.

The Transocean Norge rig is booked for the high-impact Velocette exploration well (Longboat, 20%), which is expected to spud in Q3 2022 and is targeting a large gas prospect with gross mean volumes of 177 mmboe. The well has attracted considerable attention and was recently featured on Westwood Global Energy Group's list of "Key wells to watch in 2023". The chance of success associated with the Velocette prospect is 30%.

The Company is working to confirm up to two additional wells for its 2024 drilling programme alongside the firm well commitment on the Lotus prospect which is expected to be drilled in H2 2024.

Kveikje and Oswig are among the five largest discoveries made in Norway in 2022 and in recognition of this excellent exploration achievement, Longboat has been awarded the Norwegian "Explorer of the Year Award" by GEO365 for 2022.

Malaysian Bid Round

Under the Malaysian Bid Round ('MBR') 2022 Longboat, via its subsidiary Longboat Energy (2A) Limited, has been awarded by Petroliam Nasional Berhad ('PETRONAS') a Production Sharing Contract ("PSC") for Block 2A, a large exploration block offshore Sarawak with material gas resource potential. MBR is an annual licensing round organised by Malaysia Petroleum Management (MPM), PETRONAS as the custodian of petroleum resources in Malaysia.

Longboat will become operator with a 36.75% interest in the PSC alongside partners Petronas Carigali Sdn. Bhd (40%), Petroleum Sarawak Exploration & Production Sdn. Bhd. (7.5%) and Topaz Number One Limited (15.75%).

Block 2A is offshore Sarawak, north-west of the prolific Central Luconia hydrocarbon province, outboard of recent gas discoveries. The Block covers approx. 12,000km² and is located in water depths of between 100-1,400 metres. One of the world's largest LNG facilities, the Bintulu LNG plant, is located onshore on the coast of Sarawak.

A number of large prospects across multiple plays have been identified across Block 2A. The main prospect is a large anticlinal structure called Kertang with a closure of over 100km² at multiple levels and significant volume potential representing multiple trillions of cubic feet of gas in stacked reservoirs. Seismic indicators for the presence of gas can be observed in the area and over the crest of the prospect. These indicators, together with geochemical analysis of sea floor samples over the main prospect provide strong evidence of the area being gas-prone.

PETRONAS is actively supporting new entrants in the region and the Company believes establishing a presence in the Malaysia via the Block 2A PSC will open-up further opportunities in the future.

Helge Hammer, Chief Executive of Longboat, commented: 

"Our immediate focus remains on progressing and monetising the exploration successes achieved to date in Norway. We are encouraged by levels of interest in the Kveijke discovery which has been re-invigorated by the recent award of the adjacent Lotus asset. As well as the high-impact Velocette well scheduled for Q3 this year, we are looking to establish up to a three well programme for 2024. 

"We are delighted to have been awarded Block 2A which marks our entry into Malaysia, where our management team and partners have extensive past experience. This potentially significant opportunity has been acquired without a material initial cost obligation and with three years until a drill decision. By establishing a presence in Malaysia and building a relationship with PETRONAS we are significantly expanding Longboat's opportunity set."

The information contained within this announcement is considered to be inside information prior to its release.

Ends

Enquiries:
Longboat Energy
Helge Hammer, Chief Executive Officer Jon Cooper, Chief Financial Officer Nick Ingrassia, Corporate Development Director	via FTI
Stifel Nicolaus Europe Limited (Nominated Adviser and Broker)
Callum Stewart Jason Grossman Simon Mensley Ashton Clanfield	Tel: [phone]
FTI Consulting (PR adviser)
Ben Brewerton Rosie Cobbett Catrin Trudgill	Tel: [phone] [e-mail]

Background

Longboat Energy was established at the end of 2019 to create a full-cycle E&P company through value accretive M&A and near-field exploration. Since June 2021, Longboat has entered a series of four transactions to acquire interests in a portfolio of nine, gas-weighted exploration wells drilling on the Norwegian Continental Shelf close to existing infrastructure. To date, eight of these wells have been drilled resulting in five hydrocarbon discoveries (Egyptian Vulture, Mugnetind, Rødhette, Kveikje and Oswig), representing a technical 63% success rate.

Longboat has targeted exploration prospects located in close proximity to existing infrastructure, with an overlap between exploration partners and infrastructure owners, providing a portfolio with a clear low-cost route to monetisation and low-carbon drilling and development opportunities, well aligned to Longboat's ESG targets which includes a corporate 'Net Zero' on a Scope 1 and 2 basis by 2050.

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 Hilde Salthe, Managing Director Norge, who is a qualified person for the purposes of the AIM Guidance Note for Mining, Oil and Gas Companies. Ms Salthe is a petroleum geologist with more than 20 years' experience in the oil and gas industry. Ms Salthe has a master's degree from Faculty of Applied Earth Sciences at the Norwegian University of Science and Technology in Trondheim .

  Glossary

"mmboe"

Million barrels of oil equivalent

 

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