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Zengas, have a look at what Sval Energy have achieved during the same time period.
There were deals to be done but the LBE management weren’t up to it.
The share price is 16p because the market has zero confidence in them. Should they put the JAPEX funds to good use I will be both pleased and relieved, but the first 5 years of Longboat’s existence have seen nothing but the erosion of shareholder value - that’s a fact.
How can you remotely compare Sval Energi to LBE in that time period and to date since it is a non listed private equity backed company.
It was fully funded by Hi-Tec Vision involved in takeovers and acquisitions to reach material size/self sufficiency that HiTech is now selling.
LONDON, Jan 19 (Reuters) - Private equity firm HitecVision plans to sell its Norwegian oil and gas producer business Sval Energi in a deal valued at up to $1 billion including debt, four sources said.
HitecVision established Sval in 2019 and the company has since grown through a series of acquisitions, including holdings from Equinor EQNR.OL and Suncor SU.TO.
Sval produces around 70,000 barrels of oil equivalent per day from stakes in 15 Norwegian fields, and has four development projects, according to its website.
The sale is expected to raise several hundred million dollars which, together with its debt of around $700 million, values Sval at up to $1 billion, according to two sources familiar with the sale process. Sval and HitecVision did not respond to requests for comment.
https://www.nasdaq.com/articles/private-equity-backed-norwegian-oil-producer-sval-energi-up-for-sale-source
You say there were deals to be done ? so name which ones ? and where ?.
Management weren't up to it ? - On what basis ? Competing with PE maybe ?
You say the market has zero confidence. I bet to differ. If so Japex and it's major shareholder ie the Japanese Govt, would not have done a deal with LBE barely 10 months ago. Incidentally this has actually the kind of step change financing that Hi-tec provided.
As a listed company we are at the sentiment and whims of PIs more so than the rest of the core investors who won't see the bigger picture especially now as to what is in place. The low free float exacerbates both the share price movement on both buys/sells when it could move 10% either way as in recent weeks on little volume.
https://hitecvision.com/investment/sval-energi/
Sval Energi was established in 2019 with the aim of building an energy company with a broad asset base. Currently, Sval holds interests in Gassled, the world’s largest offshore gas transmission system, and in the Polarled pipeline; the company participates in the exploration and development of oil & gas fields; and owns a wind park development in Finland. As a new generation energy company, Sval sees the need to reduce the industry’s carbon footprint, the world’s need for clean energy and also recognizes the profitable business opportunities that arise in the ongoing energy transition.
Case responsible John Knight
Zengas on the one hand you are suggesting there were no deals to be done, and on the other admitting that Sval have turned into a billion dollar company “through a series of acquisitions” during exactly the same time period.
Simply saying they can’t compete with private equity is a poor excuse.
Paul, no disrespect but you don’t have a clue what you are talking about re Sval, deals or private equity.
I asked you for evidence of your claims on deals to be done for lbe, instead it’s met with a nonsense reply.
Don’t you understand how Sval was turned into ‘a billion dollar company ‘. I doubt it .
You’re new here and it shows Zengas. Don’t attempt to give me a lesson on it, I know the LBE history only too well.
Read back through the reports and listen to the old presentations - the board have admitted there were deals to be done although obviously I don’t know the specifics of them.
I know exactly how Sval Energy grew and I’m not saying that Longboat could and would have grown to the same extent, but they were making acquisitions at a time when you appear to be claiming there weren’t any to be done.
Well fyi Paul i've followed LBE since day 1 regardless of whatever being so called 'new here' to you somehow means. Maybe i just like the raft of new assets and Japex deal more so than you can see from your experience to date. An absolute shame that other investors such as myself come aboard and find this an attractive proposition which after all is needed given you're so far down from 100p to 16p.
Finally you now say 'you don't know the specifics of them' (deals to be done). Exactly you don't know other than your emotional reaction to try and explain it.
Well if you know how SVAL grew, you'd know it has no relevance to LBE in bringing it up as some sort of comparrison in the first place as it is a private equity created company by HiTech and should realise how the private equity influence on deal competition works and how others can be pushed down the food chain. Of course there are deals to be done but you'd have to bear in mind that for some sizeable deals you'd need to win through to preferred bidder status and why imo we've only had the small acquisition to date but hopefully 1,000 boepd to be achieved in the next 8 weeks.
It's why now they can say that the Japex $100m financing can give them the firepower they need along with potentially doubling that amount on RBL to get bigger and better deals - isn't that the point and why some were asking why were we bothering with small 300 boed deals (not so bad now as it approaches 1k boepd) but now also producer status.
If you still don't understand or seen the competition of PE re deals in Norway then there's a clue about S.E Asia where they say 'Private Equity largely absent' and 'Key competition from smaller and/or domestic entities'.
So what you’re essentially saying Zengas is that the Longboat management started the company with the aim of acquiring production assets, only to realise afterwards that they could not compete with private equity after setting it up and needed the JAPEX deal to be competitive.
That would mean they were totally incompetent from the start.
Maybe you’re right!
Sorry Paul, contrary to what you try to put in peoples mouths, No.
You like to think you what you write is correct without checking facts and it's why i don't give you any credit in knowing what your talking about.
As someone who is 'new here and it shows' as you put it, let me remind you that without any fact checking on 1st Dec you stated our second biggest holder was out when in fact it was a transfer within the same group that i pointed out.
It’s not putting words in your mouth, it’s what you’ve said!
Like it or not Zengas, Longboat Energy has been nothing but a failure so far. The share price has dropped from £1 to 16p which should tell you everything you need to know but for the benefit of others I shall provide the history.
Longboat launched with the objective of securing production assets in Norway (predominantly gas). When the pandemic hit and energy prices dropped significantly they tried to negotiate too hard and subsequently lost out on doing a deal when commodity prices were at historic lows (no foresight).
After the pandemic energy prices spiked which meant the Longboat management were definitely now unwilling to pay the market prices for production assets. They ended up instead getting desperate and securing a portfolio of exploration prospects, boasting at the time that Norway had a 50% success rate at exploration and these prospects were carefully chosen by their expert technical team. Well that technical team turned out to be utterly useless - out of 10 prospects (Rodhette, Egyptian Vulture, Mugnetind, Ginny, Hermine, Cambozola, Copernicus, Oswig, Velocette & Kveikje), only one of them found commercial hydrocarbons. Their technical team would have had better success throwing darts at a wall - 10% success compared to an industry average of 50%. The only successful well had an over 50% CoS as well!
Having wasted all their money on a failed exploration programme it’s no wonder several of their institutional investors wanted out and weren’t prepared to back them further.
They were between a rock and a hard place but thankfully managed to do a deal with JAPEX and they have now secured a small production deal but even that has had cost overruns that would have been disastrous had JAPEX not come on board.
Now I’m not saying they can’t go on to be successful, and I’m hopeful that they can. But don’t kid yourself or others, it’s been a total disaster thus far.
You can disagree all you like but the market agrees with me, hence a share price of 16p despite the Kveikje discovery & nearby license area, the JAPEX deal and the Malaysian exploration prospects. Sentiment is in the toilet and for good reason.
Did you sell out Paul? I remember you saying a couple of years ago that you held quite a chunk? As did mozzabezza, not heard from him for a while either..
I'm still here, in from 70p in 2020, have averaged down quite a bit since then.
I'm comfortable waiting, believing they've finally got themselves in the position to do well from here.
Share price performance has been disappointing for sure, but I don't put all the blame on the company. I believe the pandemic changed the market completely. Pretty much all deals where shelved initially, there was hardly anyone wanting to sell when the oil price was so low/unstable, not in Norway anyway. Then PE leveraged cheap money massively, which skewed the market dynamics as the market for M&A began to come back. The share price has not recovered from the II sell down, I guess it's whether one sees that as a buying opportunity. But if you don't believe in the management, as you clearly don't, then I guess you see no upside from here.
Paul because you still can’t grasp what I’ve said and twisting it to suit the situation you find yourself in.
Anyway enough, I’ll leave you to look back while I and some of the others look forward to the future with the 1st production deal bagged, Japex funding deal, largest undrilled target off Sarawak consolidated all in the past 6-9 months with upcoming carried drilling Q3, wider Asian region team and deal sourcing in both jurisdictions.
I’m still holding and have also averaged down a bit Whirlaw. I do agree with a fair amount of what you say, but I think management performance has been extremely poor to date. I think it’s undervalued at the moment given the licenses they have in Norway and the prospects in Malaysia, and I’m hopeful that the JAPEX backing will enable them to create some shareholder value.
I just think it’s important to be honest about how the company has performed to date, and an 84% drop in the share price since the IPO tells its own story. That is pure destruction of shareholder value.
I share in the hope they can turn this around Zengas, but we are now waiting for them to pull a rabbit out of the hat.
They have a lot to do to convince this whole setup isn’t purely designed to line the board’s own pockets, but we will see.
Long term holders have very good reason to be cynical. Cynicism based on the experience of holding shares in this company for the past 4/5 years. Cynicism based on facts not speculation.