Longboat Energy, the emerging full-cycle North Sea E&P company with a portfolio of significant, near-term, low-risk exploration assets, is pleased to announce the commencement of drilling operations on the Egyptian Vulture exploration well (Company 15%).
The drilling of the Egyptian Vulture prospect is being undertaken by the West Hercules semi-submersible drilling rig. The Egyptian Vulture well is targeting gross mean prospective resources of 103 mmboe with further potential upside to bring the total to 208 mmboe on a gross basis. The chance of success associated with this prospect is 25% with the key risk being related to reservoir quality and thickness.
The well, operated by Equinor, is expected to take up to seven weeks to drill with an estimated pre-carry net cost to Longboat of c.$5 million (c.$1.1 million post tax).
A further announcement will be made when drilling operations have been completed.
Helge Hammer, Chief Executive of Longboat, commented:
“I am pleased that we have now commenced drilling operations on our second exploration well in our short term three well programme following the commencement of the Rødhette well last week. It is no overstatement to say that the next few weeks will be an extremely busy and exciting time for Longboat with each of these wells having the potential to create significant shareholder value.
“The exploration programme over the next 18 months offers shareholders a unique opportunity to gain exposure to a drilling portfolio of seven wells targeting net mean prospective resource potential of 104MMboe 1 with an additional 220 MMboe (1) of upside which provides the potential to create a Net Asset Value of over $1 billion based on precedent transactions in the Norwegian North Sea for development assets.”
The information contained within this announcement is not considered to be inside information prior to its release.
1. All resource figures and chance of success estimates are from the ERC Equipoise Competent Person Report and using a gas-to-barrel of oil equivalent conversion factor of 5,600 scf/stb
Helge Hammer, Chief Executive Officer
Jon Cooper, Chief Financial Officer
Nick Ingrassia, Corporate Development Director
Background Longboat Energy was established by the ex-Faroe Petroleum plc (“Faroe”) management team to create a full-cycle North Sea E&P company through value accretive M&A and low-risk, near-field exploration. The management team has a proven track record of delivering value to shareholders through exploration success, accretive acquisitions and farm-ins, and a demonstrated ability to monetise discoveries through sales and asset swaps. At Faroe, the team grew reserves from 19 MMboe to 98 MMboe between 2013 and 2018, a compounded annual growth rate of approximately 39%. The team monetised numerous assets through development and active portfolio management, including asset swaps and sell downs. Faroe Petroleum was sold to DNO ASA in January 2019, providing a Total Shareholder Return of 129% to investors from the previous equity fundraise.
The Company has created a hand-picked portfolio and material drilling programme, including seven attractive exploration wells over the next 18 months and further appraisal drilling likely on success.
Estimates of reserves and resources have been prepared in accordance with the June 2018 Petroleum Resources Management System (“PRMS”) as the standard for classification and reporting with an effective date of 31 December 2020.
Review by Qualified Person
The technical information in this release has been reviewed by Helge Hammer, Chief Executive Officer, who is a qualified person for the purposes of the AIM Guidance Note for Mining, Oil and Gas Companies. Mr Hammer is a petroleum engineer with more than 30 years’ experience in the oil and gas industry. He holds a degree in Petroleum Engineering from NTH University in Trondheim and an MSc in Economics from the Institut Français du Pétrole in Paris.
Million barrels of oil equivalent
Norwegian Continental Shelf
those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from undiscovered accumulations
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