Longboat pulling out of Norwegian offshore E&P venture

June 17, 2024
Longboat Energy sells shares in LJN and exits from Norway, as it makes pivot to focus on Southeast Asia.

Offshore staff

STAVANGER, NorwayLongboat Energy has decided to withdraw from E&P in Norway and to sell its 50.1% stake in the Longboat Japex Norge (LJN) joint venture to Japan Petroleum Exploration Co (JAPEX).

Management plans to look at opportunities in other parts of the world.

The company cited a scarcity of acquisition opportunities offshore Norway suitable for an operation with limited capital. Recent structural changes to the Norwegian upstream industry, it added, had favored an increasingly small group of very large E&P companies with long-term investment plans and access to low-cost capital.

Longboat had also encountered problems with its producing interests in the North Sea. These included disappointing performance from the Equinor-operated Statfjord Satellites (LJN has a 4.80% unitized interest in the Statfjord Øst Unit and 4.32% in the Sygna Unit); and slow progress in advancing the Kveikje discovery (10%), both factors in its projected near-term working capital shortfall.

The situation could have led to the company forfeiting some or all of its shares in LJN.

Under the transaction, which remains subject to regulatory approvals and lenders, JAPEX will also assume all financial obligations associated with LJN including all staff and running costs going forward.

Assuming the transfer does complete, Longboat plans to direct the proceeds to fund its working capital requirements for its operations offshore Malaysia as it looks to build a business in Southeast Asia.

It claims that its growing portfolio in the region includes sought-after acreage and operatorship in one of the most promising basins.

In the near-term, Longboat plans to focus on its activities offshore Sarawak, including Block 2A, containing the giant Kertang prospect. A competent persons report will assess the potential size and risk associated with Kertang, which could be one of Malaysia’s largest undrilled structures.

Various large companies have approached Longboat regarding Block 2A. Following talks with Petronas, it plans to open a farm-out process to bring in a suitable partner.

Earlier this year, Longboat also signed an Area of Mutual Interest agreement for shallow-water Sarawak with an international E&P company to pursue discovered resource opportunities, as offered by Petronas.

It has since been provisionally granted an award, subject to negotiation of certain contractual terms, for acreage in shallow-water offshore Sarawak containing various undeveloped gas fields that are said to be suitable for near-term development.



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