UK's Longboat farms into seven-well campaign off Norway
Longboat Energy has struck a deal to buy into a seven-well exploration campaign off Norway, the London-listed junior announced on June 1, adding it planned to raise £35mn ($50mn) by placing new shares to pay for the acquisition.
The company, established in 2019 by the former management team of Faroe Petroleum, said the deal would be structured as three farm-in transactions. It added that the transaction was classified as a reverse takeover, and that its shares would be temporarily suspended from trading.
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Longboat did not say which exploration prospects it was farming into, nor specify which licence partners it would have. But it said the farm-in deals had been negotiated "on a bilateral basis to create a tailored exploration drilling portfolio with a balanced risk/reward profile."
"The farm-ins are corner-stone with a single, multi-licence deal with a major oil and gas company which is one of the most active and successful explorers on the Norwegian continental shelf," it said. "The farm-ins represent an opportunity to take advantage of cyclical budget cuts in the sector to accelerate Longboat's first steps towards building a full-cycle E&P company."
The seven wells will be drilled in the next 18 months, with work on the first scheduled to start in the third quarter. The programme is targeting an initial 104mn barrels of oil equivalent, Longboat said, with a further 220mn boe of "upside and follow-on prospectivity."
The fact that the vendors are retaining interests in six of the seven licences demonstrates their value, the company said.
"After Faroe was sold for $900mn in 2019, the management team formed Longboat to replicate that success," CEO Helge Hammer said in a statement. "I am very pleased that Longboat is taking over where Faroe left off with a unique opportunity for shareholders to invest in a high-impact, low-risk, multi-well exploration drilling programme."