Spud of Kveikje Exploration Well

RNS Number : 1608E

Longboat Energy PLC

09 March 2022

 

9th March 2022

Longboat Energy plc

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

Spud of Kveikje Exploration Well

Longboat Energy, the emerging full-cycle North Sea E&P company is pleased to announce the commencement of drilling operations on the Kveikje exploration well (Company 10%).

Kveikje is the primary prospect in licence PL293B, which lies in an area north of the giant Troll field in the Norwegian North Sea with many producing fields and significant infrastructure. The Kveikje well will be drilled close to recent discoveries, lying c. 8km from the Swisher discovery and c. 10km from the Toppand discovery. If successful, Kveikje could potentially form part of an area cluster development.

The prospect is an Eocene Balder Formation injectite with seismic amplitude support. Injectite reservoirs are typically characterised by excellent reservoir properties, with recent exploration successes of this type including the King and Frosk discoveries in the Balder and Alvheim area respectively. The exploration well has further potential upside in the underlying Paleocene Rokke and Late Cretaceous n'Roll secondary prospects.

Kveikje is estimated to contain gross mean prospective resources of 36 mmboe with further potential upside estimated at 79 mmboe on a gross basis. The chance of success associated with the Kveikje prospect is 55% with the key risks being trap presence and seal integrity.

Rokke and n'Roll have an additional 127 mmboe of gross mean prospective resource with chances of success in the range of 14%-34% which have not been reviewed by ERCE and are based on Operator estimates.

The drilling of the Kveikje well 35/10-8S is being undertaken by the Deepsea Stavanger semi-submersible drilling rig and operated by Equinor and is expected to take up to four weeks to drill.

A further announcement will be made when drilling operations have been completed.

Helge Hammer, Chief Executive of Longboat, commented:

"I am pleased that we have now commenced drilling operations for the fifth exploration well in our drilling programme.

"Longboat Energy's 2022 exploration programme offers shareholders a unique opportunity to gain exposure to a drilling portfolio of three wells targeting net mean prospective resource potential of 69MMboe ¹ with an additional 256 MMboe ¹ of upside."

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

Notes :

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 four of the seven committed wells in the programme, discovering hydrocarbons at Rodhette, Egyptian Vulture and Mugnetind.  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 Masters Degree from Faculty of Applied Earth Sciences at the Norwegian University of Science and Technology in Trondheim.

Glossary

"mmboe"	Million barrels of oil equivalent
"NCS"	Norwegian Continental Shelf
"Prospective Resources"	those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from undiscovered accumulations

 

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