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Longboat Energy farming into seven-well exploration campaign off Norway

Longboat oil discovery
Helge Hammer, CEO of Longboat

Longboat Energy intends to raise £35 million via a share placement to help pay for its spot on an exploration campaign off Norway.

The London-listed firm said it had agreed to farm into the seven-well programme, which will get under way this year.

Longboat was formed in 2019 by the management team of Faroe Petroleum, an Aberdeen-based business which fell to a hostile takeover by Norwegian company DNO earlier that year.

Bosses at Longboat, including chairman Graham Stewart and chief executive Helge Hammer, believed they could “pick up where Faroe left off” by creating a new North Sea-focused exploration and production business.

Longboat is now poised to acquire 9-25% working interests in seven targets spread across eight licences.

It did not say which exploration prospects it was farming into, but it is understood Norwegian energy giant Equinor is the main licence partner.

The proceeds of the share placement will go towards paying for the transactions and covering Longboat’s share of the drilling costs.

As the acquisition was classified as a reverse takeover, Longboat’s shares have been suspended from trading.

In addition, Longboat has lined up a £52m exploration finance facility.

It said the seven wells would be drilled in the next 18 months, with the first commencing in Q3 2021 and a further three before year-end.

The campaign is targeting an initial 104 million barrels of oil equivalent, with an additional 220m boe of “upside and follow-on prospectivity”.

All of the prospects are within tie-back distance of existing platforms and could generate an estimated $1 billion for Longboat, going by recent M&A activity involving Norwegian development assets.

Longboat said it was taking advantage of “cyclical budget cuts in the sector” to accelerate its first steps towards building a full-cycle E&P company.

It said the high-quality nature of the portfolio was evidenced by the vendors retaining interests in six of the seven targets included in the farm-ins.

Mr Hammer said: “After Faroe was sold for $900 million in 2019, the management team formed Longboat to replicate that success.

“I am very pleased that Longboat is taking over where Faroe left off with a unique opportunity for shareholders to invest in a high-impact, low-risk, multi-well exploration drilling programme.”

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