Longboat Energy Gets Stakes In Two Norwegian Gas Prospects

Oil and gas company Longboat Energy has farmed into two near-term, gas-weighted exploration prospects on the Norwegian Continental Shelf targeting 2.2 billion boe through an agreement with OMV.

Longboat said that it executed a two-well farm-in agreement with OMV to enter three licenses on the NCS containing material, gas-weighted prospectivity near existing infrastructure in return for a partial cost carry, subject to certain cost caps.

The licenses contain two firm wells on the Oswig and Velocette prospects anticipated to be drilled in the summer of 2022 and the second quarter of 2023 respectively.

All the licenses are operated by OMV which will retain a 40 percent working interest post-transaction. The licenses have significant follow-on prospectivity which would be de-risked by any exploration success.

The consideration for the acquisition of the interests comprises an aggregate pre-tax carry of approximately $12.4 million. The associated expenditure is anticipated to be met by a combination of Longboat’s existing cash resources and drawings on its Exploration Finance Facility. The company is fully funded for its current committed expenditure.

The transaction seeks to build on Longboat’s recent exploration success at Kveikje, Egyptian Vulture, and Rødhette by adding two material wells, increasing its net un-risked mean resources by 45 mmboe to 110 mmboe across four firm exploration wells drilling in the next 12 months, including the currently drilling Cambozola well.

The first prospect scheduled to be drilled this summer is Oswig in PL1100 which consists of a HPHT Jurassic rotated fault block nearby the producing Tune and Oseberg fields in the North Sea, operated by Equinor. The well is targeting the Tarbert and Ness formations, two separate intervals which are estimated by the operator to contain combined gross unrisked mean resources of 931 mmboe.

The Oswig geological chance of success is estimated to be 36 percent and the key risks are reservoir quality and fault seal. Oswig is operated by OMV while the other licensees are Wintershall Dea and Source Energy.

Several additional fault blocks have been identified on PL1100 and PL1100B and are estimated to contain a further gross unrisked mean resources of 80 mmboe which would be significantly derisked by an Oswig discovery.

Velocette is a gas-condensate prospect targeting Cretaceous Nise turbidite sands on the eastern flank of the Utgard High in the Norwegian Sea which have been identified following recent seismic reprocessing.

It benefits from seismic amplitude anomalies indicative of gas-filled sands located within tieback distance from the Equinor operated producing Aasta Hansteen field.

Velocette is estimated by the operator to contain gross unrisked mean resources of 1,301 bboe with a geological chance of success of 35 percent. Several follow-up opportunities exist with aggregate gross unrisked mean resources of around 2 billion boe.

The well will be operated by OMV and is anticipated to be drilled in the second quarter of 2023. The other licensee is Inpex Idemitsu Norge.

“We are pleased to be adding two high-quality, gas-weighted exploration wells into our forward program following our recent success at Kveikje and our discoveries at Egyptian Vulture and Rødhette in 2021,” Helge Hammer, Chief Executive of Longboat, said.

“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 program targeting net mean un-risked prospective resources of 110 million, a 68 percent increase. These important wells also maintain the Company’s focus on material gas opportunities near infrastructure at a time when European energy security remains a top governmental priority.

“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,” Hammer concluded.

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