Oil and gas exploration and production company Longboat Energy said Monday it had completed its transaction with Japan Petroleum Exploration Co., Ltd ("JAPEX") to establish a joint venture in Norway, with the initial investment of US$16 million received by the renamed entity Longboat JAPEX Norge AS.
As part of the transaction, Longboat JAPEX will use part of the JAPEX investment to repay an intercompany loan of NOK 45.5 million (approximately £3.5 million) to Longboat Energy.
The contingent consideration of US$4 million, payable by JAPEX into the JV, associated with the recently announced production acquisition, will be paid on completion of that transaction which is anticipated toward the end of the year.
The third tranche (the "Velocette Tranche") of up to US$30 million is contingent on a successful discovery on the Velocette offshore well, which is expected to spud in September.
The amount payable under the Velocette Tranche is based on a sliding scale applied to the gross resources approved for development by the Norwegian Ministry of Petroleum and Energy, Longboat said.
Having completed the transaction, the US$100 million Acquisition Financing Facility to finance acquisitions and associated development costs has been established and is available for drawing by the JV.
Longboat JAPEX is owned 50.1% by Longboat and 49.9% by JAPEX.
Helge Hammer, Chief Executive of Longboat, said:"We are pleased that the creation of the Longboat JAPEX joint venture has completed as scheduled and now look forward to pursuing further acquisitions and opportunities on the Norwegian Continental Shelf to follow on from the first joint transaction announced at the beginning of this month.
"In the near term, we are looking forward to the drilling of the high impact Velocette exploration well (JV 20%) which is expected to spud in September."
The well is targeting the Velocette prospect, and will be drilled using the Transocean Norge semi-submersible drilling rig, in a water depth of about 475 meters.
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