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Seems to be that for the great acreage prospects lbe has, we need to be closer to drilling to actually get some excitement going. Unfortunately depending on when the farm out is finalised, the drill and funding for the drill could be year or years away? Does that sound like a reasonable timeline?
Until then not much to do apart from wait around for farm out details around how much we retain of the acreage and how much funding we’d need to raise or have a carry on? Any thoughts?
Not really a fair assessment.
We’re being awarded several already drilled and proven fields - news pending next week.
Majors already wanting to farm in to the block - if they have a rig on contract already (typically a major will have a rig on contract for say 2 years (to do infill wells, exploration and work overs) and within that two years, they will have a large chunk of time that the rig is sat at port doing nothing. If they farm in that space will get filled quickly with an exploration well. Better to drill a well rather than paying 300,000k a day to sit in port.
Secondly there are the terms of a farm out, how much cash are they paying to farm in? Lots of work already done on Kieran’s and the partner will need to pay the going rate to get in.
Then there is the turf war between shell and total in Malaysia with shell dominating the acreage in our region and total wanting to get in. How much do total want it and how much do she’ll want them away from their adjacent blocks.
Lots going on. Market not caught up yet.
Well CPR, farm in and drill are actually all targeted before UPLs drill so that gives you some idea of the value disconnect on LBE + already drilled prospects being awarded on the cards
If prospect is as big as they say it is ‘largest in Malaysia’ then current market cap looks very silly indeed
Opportunity to be involved in the very early stages of something that looks like it could be huge but as always do your own research
Offshore is very different to onshore.
Only thing keeping me from increasing my position is the fact that after cpr there is essentially a count down to get the farm down done in 6 months , which is a challenging timeline to say the least, as cash runs out Q1 ‘25 . That means LBE would need to raise cash in this capital markets environment before year’s end imo. Does that sound right?
All imo dyor
Seav, I say this not in a patronising way but please read up on the last RNS’s.
Once an oil company has reserves I.e. drilled a well and found oil or gas that’s commercially viable, they can then approach a bank for Reserve lending.
Longboat are being awarded reserves I.e we are skipping the drilling part and going right to the ‘we found hydrocarbons, let’s develop it’ part.
Geraldine has just joined the board and has 35 years experience in financing within the oil and gas industry including RBL’s. That’s no coincidence IMO that they would bring her in days after finding out about the DRO award.
RBL will be used to fund this and 20p share price will look like a gift IMO.
Cheers deeko. I couldn’t locate reference to discovered reserves in the rns? Even if AMI leads to a discovered field , an appraisal well would still need to be drilled before any RBL discussions are entertained, which means a long while before any actual drill bit moves. Before that funding is key for our share unless the partner takes on the risk of funding our share via a carry?
All imo
If you think multiple TCF and DRO with majors already in discussion with a highly experienced board is worth only £5million (takeaway cash) then I would love to hear your thoughts as to why UPL is valued at £40million
Which RNS does it say we are in discussions with Majors?
And ex cash we are valued at c.£10mn , which is more or less what we were valued at when we had Malaysia plus Norwegian assets as well. I’d be happy to be proven wrong with my smaller position if we do get a rerate like upl. Unfortunately not aware of upl other than that they have an attractive onshore opportunity vs our offshore ones.
I suggest you read the recent RNS as to how much cash they and the interest partners have
Will be good to have the CPR before Thursdays AGM;
"Multiple large companies" in that area, Total, Shell etc
"The Company has recently commissioned ERCE to undertake a competent persons report ("CPR") to confirm the potential size and risk associated with Kertang, believed to be one of the largest undrilled structures in Malaysia. It is anticipated the CPR will be published at the end of June.
Following recent increased interest levels in exploration for world-scale fields, multiple large companies have approached Longboat regarding Block 2A. Having consulted with PETRONAS, the Company now intends to run a farm-out process during H2-24 to identify a suitable partner."
And this too, exciting week ahead anyhow even if the CPR goes into July. The agm and meeting after should provide lots of information.
"Longboat is pleased to announce that it has provisionally been granted an award, subject to the successful negotiation of certain key contractual terms, for acreage in shallow water offshore Sarawak containing several material, undeveloped gas fields capable of near-term development. These resources are an important addition to Longboat's growing Asian portfolio."
I think the market was shocked (in a good way) to see CPR be released so quickly after board change, do not forget it is a third party company doing CPR so even July is fine with me
Early day AET vibes but starting with a market cap considerably lower, I am happy to see how this unfolds year end and beyond as very confident in management
Anyway enough yapping from me, have a good weekend
Seav, if you look at the Petronas website, you will see that the acronym DRO literally stands for 'discovered resources opportunities'.
https://www.petronas.com/media/media-releases/petronas-signs-new-discovered-resource-opportunities-production-sharing