Emerging North Sea-focused E&P business Longboat Energy reported slow but steady growth this morning, as it remains fully-funded to complete its ongoing committed drilling programme.
The UK headquartered firm is focussed on growth through value accretive M&A transactions and creating significant value with the drill-bit, both through infill drilling in existing fields and through near field exploration drilling while retaining its HSEQ and ESG performance.
The firm reported that three bilateral transactions were executed in June 2021 to farm-in to seven, near-term material exploration wells on the Norwegian Continental Shelf.
It said that four wells were drilled to date with three discoveries, which included an Egyptian Vulture, which led to a material discovery with significant upside potential, as well as Rødhette, which had potential commercialisation via existing infrastructure.
Meanwhile, the wells in Mugnetind had a sub-economic discovery, and Ginny/Hermine was a dry well completed after the results period.
The firm retains cash reserves of £26.3m, and a tax rebate receivable of £8.1 million. Loss after tax was £4.7m, which included a write down of Mugnetind well.
Looking forward, Longboat said finances will be buffered by an Exploration Finance Facility for £50m available for 2022.
It is also participating in a number of processes where it has specific knowledge and can take advantage of the continuing market dislocation
Nonetheless, it warned that in the short term, the spike in commodity prices will make the M&A market challenging but the move away from Russian oil and gas will further strengthen the strategic case for Norwegian resources.
Chief Executive Helge Hammer commented: “Longboat remains well-positioned having made one material discovery and another with commercialisation potential from our first four wells. In the next six months, we will have results from three further exploration wells, each of which could be transformational for the business”
“Furthermore, we continue to leverage our excellent industry relationships and are currently participating in a number of M&A processes.”