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Longboat agrees two-well farm in deal with OMV

© Maersk DrillingMaersk Drilling one-well contract
Maersk Intrepid

Longboat Energy has announced deal to farm-in to two gas-weighted exploration prospects on the Norwegian Continental Shelf led by OMV Norge.

The Norwegian-focused explorer will take 20% working interests in two wells at Oswig (PL1100, PL1100B) and Velocette (PL1016), targeting combined gross unrisked mean resources of 223 million barrels of oil equivalent (boe), of which 45 million boe is net to Longboat.

Drilling at Oswig and Velocette is expected in the summer 2022 and Q2 2023, respectively.

All the licences are operated by OMV, which will retain a 40% working interest post-transaction.

Oswig consists of a high pressure, high temperature (HPHT) Jurassic rotated fault block near the Tune and Oseberg fields in the Norwegian North Sea, operated by Equinor.

The well will target the Tarbert and Ness formations, two separate intervals which are estimated by the operator to contain combined gross unrisked mean resources of 93 million boe, or 19 million boe net to Longboat, with a geological chance of success of 36%.

The Maersk Intrepid has already been contracted to drill later this year.

The Oswig prospect is located close to existing infrastructure with tie back potential to the Oseberg and Tune fields, the company added.

Velocette, meanwhile, is a gas-condensate prospect targeting Cretaceous Nise turbidite sands on the eastern flank of the Utgard High in the Norwegian Sea.

Seismic interpretation suggests gas-filled sands located within tieback distance from the Equinor-operated Aasta Hansteen field, roughly 28 miles away.

Velocette is estimated to contain gross unrisked mean resources of 130 million boe – or 26 million boe net to Longboat – with a geological chance of success of 35%.

A number of follow-up opportunities exist within the licence with aggregate gross unrisked mean resources of around 200 million boe, which would be significantly de-risked by success in the Velocette well, Longboat said.

In total, the consideration for the acquisition comprises an aggregate pre-tax carry of approximately NOK109 million ($12.4 million), NOK 30.7million ($3.4 million) post-tax, while associated expenditure is anticipated to be met by a combination of Longboat’s existing cash resources and its NOK 600 million Exploration Finance Facility.

Longboat said it is now fully funded for its current committed expenditure.

Last year the company farmed-in to a seven-well exploration programme off Norway, which finally kicked off in September. Since then, it has made four discoveries out of five wells, three of which – Egyptian Vulture, Rødhette and Kveikje – are commercial.

A further four will now be drilled in in the next 12 months, including the Cambozola well currently in progress.

Commenting on its farm-in agreement with OMV, Longboat chief executive Helge Hammer said: “We are pleased to be adding two high-quality, gas-weighted exploration wells into our forward programme following our recent success at Kveikje and our discoveries at Egyptian Vulture and Rødhette in 2021.

“Securing these additional wells through a bilateral negotiation continues to demonstrate Longboat’s deep relationships in Norway and gives investors exposure to a significantly increased exploration programme targeting net mean un-risked prospective resources of 110 million, a 68% increase.

“With results from the high-impact Cambozola prospect due in the coming weeks, we now have a sequence of significant, potential value catalysts between now and the middle of next year. We look forward to updating the market on Cambozola at the end of drilling operations.”

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