Longboat Energy, an oil and gas company established in late 2019 by ex-Faroe Petroleum management team, has farmed into two near-term, gas-weighted exploration prospects offshore Norway, through an agreement with the Australian oil and gas company OMV.
Under the deal, Longboat Energy is acquiring 20% stake in Oswig (PL1100, PL1100B) and Velocette (PL1016), prospects targeting combined gross unrisked mean resources of 223 mmboe (45 mmboe net to Longboat).
The company will enter three offshore licenses containing these prospects in return for a partial cost carry, subject to certain cost caps.
Drilling on the Oswig well is expected to be drilled in the summer of 2022, and the drilling of the Oswig well is slated for the second quarter of 2023.
The Oswig prospect, which has a geological chance of success estimated at 36%, is located close to existing infrastructure with tie-back potential to the Oseberg and Tune fields in the North Sea.
Velocette is a gas-condensate prospect targeting Cretaceous Nise turbidite sands on the eastern flank of the Utgard High in the Norwegian Sea, which have been identified following recent seismic reprocessing. Velocette is located within tieback distance from the Equinor operated producing Aasta Hansteen field (~45 km).
Velocette is estimated by the operator to contain gross unrisked mean resources of 130 mmboe (26 mmboe net to Longboat) with a geological chance of success of 35%.
All the licenses are operated by OMV, which will retain a 40% working interest post-transaction.
"The licenses have significant follow-on prospectivity which would be de-risked by any exploration success," Longboat Energy said.
The consideration for the acquisition of the interests comprises an aggregate pre-tax carry of approximately NOK109 million ($12.4 million), NOK 30.7million ($3.4 million) post-tax.
"The associated expenditure is anticipated to be met by a combination of Longboat's existing cash resources and drawings on its NOK 600 million Exploration Finance Facility. The Company is fully funded for its current committed expenditure," Longboat added.
"The transaction seeks to build on Longboat's recent exploration success at Kveikje, Egyptian Vulture, and Rødhette by adding two material wells, increasing its net un-risked mean resources by 45 mmboe to 110 mmboe across four firm exploration wells drilling in the next 12 months, including the currently drilling Cambozola well (Longboat, 25%). These wells fit with Longboat's ESG strategy being large gas prospects, close to existing infrastructure and with plans for electrification from shore for one of the potential tie backs," Longboat Energy said.
Helge Hammer, Chief Executive of Longboat, commented: "We are pleased to be adding two high-quality, gas-weighted exploration wells into our forward program following our recent success at Kveikje and our discoveries at Egyptian Vulture and Rødhette in 2021.
"Securing these additional wells through a bilateral negotiation continues to demonstrate Longboat's deep relationships in Norway and gives investors exposure to a significantly increased exploration program targeting net mean un-risked prospective resources of 110 million, a 68% increase. These important wells also maintain the Company's focus on material gas opportunities near to infrastructure at a time when European energy security remains a top governmental priority.
"With results from the high-impact Cambozola prospect due in the coming weeks, we now have a sequence of significant, potential value catalysts between now and the middle of next year. We look forward to updating the market on Cambozola at the end of drilling operations."