Longboat Energy plc (AIM: LBE): Repositioning the business
• Taking into account the investment by JAPEX to secure 49.9% of Longboat Norge, Longboat plc holds £10.9 mm in cash. This includes £5.3 mm representing Longboat’s share of the cash in Longboat Norge (50.1% of £10.6 mm).• The cash consideration to be paid by Longboat Norge for interests in Sygna and Statfjord Øst on completion is expected to be near the headline price of US$12.75 mm announced in July. In the interim period until completion, a five well infill programme has been undertaken to double production to 600 boe/d net to Longboat Norge.
• Overall, we forecast that Longboat plc will hold ~£4 mm in cash at YE23. The repayment of £32 mm of exploration financing facility held by Longboat Norge due in November will be repaid from the £35 mm Norwegian Government tax rebate due at the same time.
• The cost of drilling Egyptian Vulture has been written off. This is not a surprise and we had previously eliminated the value of this asset from our ReNAV.
• The Lotus exploration well is expected to be drilled in 2024. This is the remaining high impact well of the programme with an unrisked NAV of £0.22 per share.
• We re-iterate our target price of £0.60 per share.
• The shares continue to trade well below the value of the business based on the Kveikje discovery and Statfjord Øst & Sygna only.
• With the Norway business being managed through the JV with JAPEX, we anticipate that Longboat business development activities to be increasingly focused on South East Asia.
Valuation
Our Core NAV is broadly 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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