Longboat Energy plc (AIM: LBE): All eyes on 2024
• With the acquisition of interests in Sygna and Statfjord Øst expected to complete in January, the process to establish a stable well-funded producing business in Norway is almost complete. FY23 production at Sygna and Statfjord Øst net to Longboat Norge is ~250 boe/d.• The acquisition of 49.9% of Longboat Norge by JAPEX in 2023 provides low cost capital and access to a strong balance sheet to develop further the Kveikje area and make acquisitions at no further dilution to Longboat plc.
• With the entry in Malaysia and the acquisition of Topaz, 2024 is expected to be an important year with (1) a significant increase in production at Sygna and Statfjord Øst early in the year when all wells will be brought on stream (we assume 600 boe/d net to Longboat Norge), (2) high impact drilling at Lotus (Norway), (3) progress in farming out the giant Kertang prospect in Malaysia and (4) potentially the acquisition of producing/development assets in Norway and/or South East Asia. We understand that Longboat is actively pursuing opportunities with multiple counterparties. We understand that Longboat is already in discussions with multiple counterparties.
• We re-iterate our target price of £0.60 per share.
Reflections on South East Asia
As illustrated by the recent acquisitions in Thailand, Malaysia and Indonesia by Valeura Energy, Jadestone Energy and Criterium Energy, there are many producing assets for sale in South East Asia that are suitable for junior E&Ps. Many large companies have been selling small or mature assets to redeploy capital in more material opportunities or fund share buybacks and dividend distributions. The recent acquisition of Hess (producing ~60 mboe/d in the region) by Chevron, who lost its key assets in Indonesia and Thailand, might lead to further asset divestments in the region. Malaysia Sarawak deep water is one of the bright spots for continuous exploration in the region with multiple recent discoveries by Petronas and Shell. Longboat’s Kertang prospect on Block 2Q is located offshore Sarawak.
Valuation
Our Core NAV based on Kveikje and Sygna and Statfjord Øst is unchanged at £0.31 per share with a ReNAV of £0.57 per share.
Longboat Energy PLC, formerly Longboat Energy Ltd, is a United Kingdom-based investment company. The Company's investment objectives is to create a full-cycle North Sea exploration and production (E&P) company in order to deliver value to investors.
Auctus Advisors is a specialist Equity Capital Markets and Advisory business with a focus in the Energy Sector.
The partners have complementary skill sets, with decades of experience across Equity Capital Markets, Investment Banking and the Energy industry. We have worked at Société Générale, Canaccord Capital, BMO Capital Markets and Schlumberger. Most recently we have worked together for many years at GMP FirstEnergy.
Auctus has been set up at the beginning of a new decade in which we see significant opportunities in the Energy space. Globally, demand for energy is at record levels and continues to grow. Conversely, investment in traditional energy sources has been severely constrained. We believe this imbalance creates opportunities for both companies and investors.
Auctus provides Corporate Broking, Equity Research and Investment Banking services.
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