Listen to our latest Investing Matters Podcast episode 'Uncovering opportunities with investment trusts' with The AIC's Richard Stone here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
I’m now aware of which discoveries have been provisionally awarded. We are in for a treat and I suspect financing will not be an issue!! It’s going to make Norway look like pocket change.
Very interesting Oiltdr - tell us more!
I noticed a poster on the board copied a snippet of JAPEX's RNS, which did suggest that this move to Malaysia was not an inevitable thing, but the result of the Nick I and James Menzies making a big decision on where to fully focus. One gets the impression they could have carried on in Norway, but just decided that in all regards Malaysia is a better bet, so chose to cut loose.
Back to zero revenue though :(
If the below poster is accurate in what they are saying, then their knowledge of the provisional award may have driven this decision to cut Norway.
( when I say 'their knowledge' I mean LBE's knowledge, not the poster's!)
Better than expected.
No dilution. $2.5m/circa £2m cash. Debt free.
57.11m shares @ 11p is £6.25 m/cap.
Provisionally awarded a cluster of several material undeveloped gas fields (and as i pointed out Topaz Energy set up at companies house barely 8 weeks ago to take these.) Too small for the majors and mid size Cos but these will be material to us - material ! They have numerous times said awarded at no cost based on a credible plan.
By comparrison, imagine instead being awarded acreage that was virgin, awaiting to be drilled and raising money for such as many Cos do and then the discovery drives the share price. The discovery is already made.
Likely RBL with an approved dev plan put forward to Petronas pre award.
The CPR will be interesting but it seems to be just on the Kertang prospect for now but from what's been described re other structures and that visually available in the past slides and the annnouncement on 29/5/24 block 2A could be well in excess of a 15 TCF opportunity.
They've consistently flagged and said Kertang is beleived to have a 9 TCF recoverable figure given it's size (2/2/24 - At about 17 mins into the interview James Menzies says they beleive there could be in excess of 9 TCF recoverable for Kertang and at 18:30 he states that 'there are multiple structures surrounding Kertang that are also extremely big - it's just that they are dwarfed by this giant.').
And 29/5/24 "recently completed a key exploration review gate with PETRONAS where additional, SIGNIFICANT prospectivity on Block 2A has been identified.
Two areas of interest have been delineated: firstly surrounding the Kertang structure, where several large structural closures analogous to Kertang have been mapped and secondly in shallow water, in the southwest of the block, where the continuation of a play that has seen several notable recent gas discoveries made in younger, shallower horizons to the south of 2A.
I'd be surprised that at least two of the largest structures when viewed in the presentation don't have in excess of 3 TCF each and then the additional shallow water play.
"Multiple large companies have approached Longboat regarding Block 2A"
With significant major interest in a farmout and operatorship, it just might attract a future cash payment to ourselves to bolster our finances significantly when considering how we take the DROs forward. It's a world class size play and market hotspot.
1) Farm-out and carry to a possible major from 52.5% down to a remaining 15-20% and a possible cash payment ?
2) It could be fairly easy to sell down a further 5% for cash to someone else when such a deal is done (who would be effectively carried as well by the major partner/operator).
The addition of industry stalwart Geraldine Murphy last month who i said might have already looked over the strategy and had her input long before her announcement was a big pointer to the ambitious plan and possible change of direction.
I can’t say too much - my understanding is that the Board hope to be in a position to tell investors at the AGM about the new acreage with undeveloped discoveries. I’m told there will be a full presentation.
What I will say is the discoveries aren’t small and could be FDP approved this year if financing in place.
LOL. Seems to me you've already said a lot!
Thanks for sharing Oiltdr - much appreciated.
(and kudos to Zengas, you had this pretty much worked out a couple of weeks ago)
The Norway nightmare is over, can't say I'm gonna miss that albatross Helge too much.
Us long term holders are now back in play!
Oiltdr are you currently located in SE Asia by any chance ?
Malcy's take on things:
"So pick the bones out of those two announcements this morning as Longboat, remarkably quickly after the recent news that Norway was proving to be somewhat less than profitable, and that its South East Asia portfolio was the future. The way that it has been done is pleasing, the company could not find any reason to stay in Norway and if they had stayed in what was a deteriorating situation there was no guaranty that they could have got out so cleanly.
Longboat has sold its 50.1% interest in the JAPEX JV for $2.5m in cash but importantly taking with it the share of the debt which adds $8.5m to the total making an $11m exit purse. As a result in one fell swoop the board has wiped the slate clean in Norway and is now preparing for life as a South East Asia focused hydrocarbon play.
And what now, well the good news is that there are the makings of a pretty handy portfolio of assets tucked away under the watchful eye of James Menzies who is somewhat of a legend in the area and has the optionality to make something really rather good out of what he starts with.
The jewel in the crown is obviously Block 2A where they have a 52.5% operated interest in this offshore Sarawak located area in eastern Malaysia and in which the ‘giant Kertang prospect’ is located. And this is indeed a jewel, we are told that ‘multiple large companies have approached Longboat’ with interest, accordingly a farm-out process will take place in H2 2024.
In addition to this, Longboat has also potentially an interest in shallow water Sarawak ‘containing several material, undeveloped gas fields capable of near-term development’. These, added to 2A are really excellent starting blocks for the company and as they have said, an important addition to the Asian portfolio.
The speed with which Longboat has got to grips with the Norwegian problem, cut a deal to sell and move forward has been very impressive. Fortunate maybe, in having 2A and Mr Menzies to call upon but I can’t think of anything or anyone better to lead the company going forward.
I have said twice now that investors should not hang around in reassessing and deciding to invest in what we should call ‘New Longboat’, with a CPR imminent I have a feeling that there is lots of upside here and maybe quite quickly too. "
- the data room for 2A will be extremely competitive. As such the farmout terms will be very favourable.
- 2A is additionally attractive as it’s outside the carbon belt - don’t underestimate the importance of this to majors.
- as for the discoveries , PETRONAS are very good at the gas offtake side which in return provides the covenant for farm out or finance.
The equity value here is potentially extraordinary.
I was always confident there was a plan in place here.
Board was recently divided between Norway and Malaysia. No idea if Japex got frustrated with lack of Norwegian progress? Or perhaps LBE decided on their own accord to focus on more exciting opportunities elsewhere?
Either way the divorce seems to have been amicable and beneficial to both parties. If you believe a farm in can be delivered in short order then there is plenty to get excited about once again. Could / should be back to 20p soon