Longboat Energy plc (AIM: LBE): Egyptian Vulture to be relinquished but Longboat plans to take the asset forward
• As part of an assessment of Egyptian Vulture, the discovery has been estimated to hold 4-68 mmboe contingent resources (1C-3C case). The study focused on seismic interpretation and distribution of areas with good reservoir.• For an appraisal well on Egyptian Vulture to be successful, it would need to encounter better reservoir quality than that penetrated by the discovery well.
• Reflecting differing views on the asset, the Joint Venture participants have not reached an agreement on an appraisal well to derisk Egyptian Vulture and will not be committing to a licence extension as required on 2 March 2023. Therefore the licence is being relinquished.
• Longboat continues to see value in Egyptian Vulture and is now looking to form a new group to take the asset forward. Rather than take over the existing licence, which would involve escalating license fees, Longboat will seek to re-apply for the acreage in the forthcoming licence round with awards due in January 2024.
• Pending further details on next steps, we are now excluding Egyptian Vulture that we carried at £0.18 per share in our Core NAV from our valuation.
• We are reducing our target price from £1.30/sh to £1.10 per share. Our estimate of the value of the Kveikje discovery alone is £0.17 per share while the unrisked value of Velocette is ~£1.50 per share
Upcoming news in Norway could rerate the share price
The company is looking to farmout Kveikje/Lotus with an update expected by the end of March. The Velocette prospect, targeting 177 mmboe (35 mmboe net to Longboat), will spud in 3Q23.
Valuation
Our new Core NAV based on the value of Kveikje is ~£0.10 per share. Our ReNAV, including the risked value of Oswig, Velocette and Lotus, is now £1.11/sh.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.