Longboat Closes Divestment of Norwegian Asset Stake to JAPEX

Japan Petroleum Exploration Co., Ltd. (JAPEX) has completed its acquisition of all the shares of Longboat JAPEX Norge AS (LJN) from Longboat Energy plc, making LJN a subsidiary of the Japanese energy firm.

The purchase price is $2.5 million for the 50.1 percent stake of Longboat in LJN, a joint venture formed by the two companies.

Longboat said in a statement that it had received the full cash consideration of $2.5 million and JAPEX has now assumed all future financial obligations associated with LJN, including its existing debt.

The move follows JAPEX’s revision of its Norwegian business policy and discussions between the company and Longboat about the future direction of LJN. Longboat had a change in management in May, when its former CEO Helge Hammer decided to step down to focus his time exclusively on his role as Chairman of LJN. Longboat Energy appointed former corporate development officer Nick Ingrassia as the company’s new CEO.

Longboat said in a separate statement that the decision follows the continuing scarcity of acquisition opportunities suitable for Longboat, the disappointing performance of the Statfjord Satellites, and slow progress on monetizing the Kveikje discovery, “all of which have contributed to a near-term projected working capital shortfall in LJN which could result in Longboat forfeiting some-or-all of its shares in LJN”.

Proceeds from the transaction, along with Longboat's existing cash resources and savings from continued cost reduction measures are forecast to provide sufficient capital through the end of the first quarter of 2025, the company said.

"I would like to thank both our staff and partner, JAPEX, for their tremendous efforts in managing to complete the process of withdrawing from Norway in just under a month from announcement,” Longboat Executive Chairman James Menzies said.

“Following completion of our transaction with JAPEX, Longboat's streamlined Board and Management team will now direct its full focus on building a business in Southeast Asia. We will take advantage of the exciting opportunity in front of us to grow shareholder value,” Menzies added.

Last month, Longboat announced a shift in focus to Southeast Asia in a “strategic pivot”. After a detailed review of its areas of geographic operation, Longboat’s board and management have decided to exit Norway and to focus on building a full-cycle exploration and production (E&P) business in Southeast Asia, where it sees significantly more potential for a small company than Norway. The company said in an earlier news release that its existing positioning and access to opportunities provide excellent value-creation potential.

Longboat maintained that it has competitive advantages in the region, including an experienced team with excellent long-term relationships and networks established across Southeast Asia. In addition, “its growing portfolio already includes sought-after acreage and operatorship in one of the most exciting basins in the region, as well as visibility on accessing many additional opportunities to diversify and grow materially its asset position,” the company added.

Longboat noted significant industry interest in Malaysian Block 2A, where it is the operator with a 52.5 percent stake. The block, located offshore Sarawak in eastern Malaysia, contains the giant Kertang prospect.

The company added that it has provisionally been granted an award, subject to the successful negotiation of certain key contractual terms, for acreage in shallow water offshore Sarawak containing several material, undeveloped gas fields capable of near-term development.

To contact the author, email rocky.teodoro@rigzone.com