Spud of Ginny & Hermine Exploration Well

RNS Number : 2452X

Longboat Energy PLC

04 January 2022

 

4^th January 2022

Longboat Energy plc

("Longboat Energy", "Longboat" or the "Company")

Spud of Ginny & Hermine Exploration Well

Longboat Energy, the emerging full-cycle North Sea E&P company with a portfolio of significant, near-term, low-risk exploration assets, including three discoveries to date, is pleased to announce the commencement of drilling operations on the Ginny and Hermine exploration well (Company 9%) in the Norwegian Sea. The well spud on 31^st December. These are the first in a high impact, four-well 2022 drilling programme targeting 75 million barrels of oil equivalent ("mmboe") net to Longboat.

The Ginny and Hermine prospects are estimated to contain gross mean prospective resources of 41mmboe for Ginny and 27mmboe for Hermine with further potential upside to bring the total to 84mmboe and 45mmboe, respectively. The geological chance of success associated with the Ginny prospect is 27% and for Hermine 22% with the key risks being related to fault seal and fluid phase.

The drilling of the Ginny and Hermine prospects is being undertaken by the West Hercules drilling rig operated by Equinor.  Well 6407/9-13, in production licence PL1060, is targeting both the Upper Jurassic Ginny and the Middle Jurassic Hermine prospects. The stacked reservoirs opportunity is located between the Galtvort discovery and Hasselmus field development.

The well is expected to take up to five weeks to drill with an estimated pre-carry net cost to Longboat of c.$2 million (c.$0.45 million post tax).

Equinor Energy AS is the operator with a 31% working interest; the other licensees are OKEA ASA (40%) and Chrysaor Norge AS (20%).

An announcement will be made, if applicable, when hydrocarbons are encountered, and/or on completion of drilling operations.

Helge Hammer, Chief Executive of Longboat Energy, commented:

"I am pleased that we have commenced drilling operations on the fourth exploration well in our seven well programme. We are in an active period of drilling with each well having the potential to create very significant shareholder value.

"A discovery in the Ginny and Hermine prospects could be developed rapidly through use of the existing infrastructure, notably through the OKEA operated Draugen platform or the Equinor operated Njord infrastructure.

"With evaluation underway to quantify the upside resource potential at the material Egyptian Vulture discovery, Longboat is now looking forward to drilling Ginny and Hermine as we continue our fully funded programme with the Kveikje and Cambozola wells spudding in the spring."

Notes :

The information contained within this announcement is not considered to be inside information prior to its release.

All resource figures and chance of success estimates are from the ERC Equipoise Competent Person Report and using a gas-to-barrel of oil equivalent conversion factor of 5,600 scf/stb

Ends

Enquiries:
Longboat Energy
Helge Hammer, Chief Executive Officer Jon Cooper, Chief Financial Officer Nick Ingrassia, Corporate Development Director	via FTI
Stifel Nicolaus Europe Limited (Nominated Adviser and Broker)
Callum Stewart Jason Grossman Simon Mensley Ashton Clanfield	Tel: [phone]
FTI Consulting (PR adviser)
Ben Brewerton Ntobeko Chidavaenzi	Tel: [phone] [e-mail]

Background

Longboat Energy was established by the ex-Faroe Petroleum plc ("Faroe") management team at the end of 2019 to create a full-cycle North Sea E&P company through value accretive M&A and low-risk, near-field exploration. In June 2021 the Company entered into three bi-lateral transactions to acquire interest in a portfolio of seven exploration wells over an 18-month period with further appraisal drilling likely on success. The portfolio has an attractive risk and reward balance, with the chance of success for each well in the 22-55% range for all-but-one high-impact prospect. The prospects are gas weighted and are all located in close proximity to existing infrastructure, with an overlap between exploration partners and infrastructure owners, providing a portfolio with a clear low-cost route to monetisation and low-carbon drilling and development opportunities, well aligned to Longboat's ESG targets which includes a corporate 'Net Zero' on a Scope 1 and 2 basis by 2050.

To finance the drilling programme, the Company raised gross proceeds of £35 million by means of a share placing and a NOK 600 million (£52 million) Exploration Finance Facility (EFF) with SpareBank 1 SR-Bank ASA and ING Bank N.V. The Company has to date completed the drilling of three of the seven committed wells in the programme (Rodhette, Egyptian Vulture and Mugnetind) discovering hydrocarbons in each well.  The Egyptian Vulture discovery has a very large area extent, and the oil-in-place volume range offers very significant upside potential which the Company is seeking to unlock.

Standard

Estimates of reserves and resources have been prepared in accordance with the June 2018 Petroleum Resources Management System ("PRMS") as the standard for classification and reporting with an effective date of 31 December 2020.

Review by Qualified Person

The technical information in this release has been reviewed by Hilde Salthe, Managing Director Norge, who is a qualified person for the purposes of the AIM Guidance Note for Mining, Oil and Gas Companies. Ms Salthe is a petroleum geologist with more than 20 years' experience in the oil and gas industry. Ms Salthe has a Master's Degree from Faculty of Applied Earth Sciences at the Norwegian University of Science and Technology in Trondheim.

Glossary

"mmboe"	Million barrels of oil equivalent
"Prospective Resources"	those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from undiscovered accumulations
scf	Standard cubic feet
stb	Stock tank barrel

 

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