Longboat Energy plc (AIM: LBE): Timely entry into an attractive geography
• Longboat has been awarded a 36.75% WI in and operatorship of Block 2A, a large exploration block offshore Sarawak (Malaysia) with multi tcf gas resource potential. Petronas holds 40% WI. Kertang, the key prospect on the block is a large anticlinal structure with a closure of over 100 km2 at multiple levels in stacked reservoirs. Seismic indicators for the presence of gas can be observed in the area and over the crest of the prospect.• Block 2A is located north-west of the prolific Central Luconia hydrocarbon province, outboard of recent gas discoveries. The Block covers ~12,000 km2 and is located in water depths of 100-1,400 m. The Bintulu LNG plant, is located onshore Sarawak. Longboat’s work commitments in the first phase are minimal.
• Offshore Sarawak is one of the few areas around the world where super majors continue to drill exploration wells. In 2022, eight new oil and gas discoveries were made offshore Sarawak. The largest oil discovery was made by Petronas in Block SK306. Within Central Luconia, Shell had discoveries at the Inai-1 and Temu-1 wells in MLNG Block, while Mubadala Energy found more gas in Block SK320 at the Cengkih-1 well. In the emerging province of Western Luconia, ConocoPhillips drilled three exploration wells in Block WL4-00 and discovered gas at the Gagau-1 well while the Salam-3 and Benum-2 wells confirmed the extension of oil and gas accumulations in adjacent fault blocks. In the mature Baram province, PTTEP made another gas discovery in Block SK410B through the Paprika-1 well, where the giant Lang Lebah was also discovered in 2019. In Sabah ultra deep waters, TotalEnergies made an oil and gas discovery at the Tepat-2 well in Block N.
• There is a good match between the asset characteristics of offshore Sarawak and Longboat’s expertise offshore Norway.
• We re-iterate our target price of £1.30/sh.
Progress in Norway and upcoming high impact well
The divestment process of Kveikje/Lotus is attracting interest and the company plans to provide an update by the end of March. The Velocette prospect with 177 mmboe (35 mmboe net to Longboat) will spud in 3Q23.
Valuation
Our Core NAV based on the value of Egyptian Vulture and Kveikje is ~£0.28 per share. Our ReNAV is now £1.33/sh. Our unrisked NAVs for Velocette and Lotus are respectively ~£1.50/sh and ~£0.45/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.
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