LONGBOAT Energy, set up by the former management of Faroe Petroleum to build a North Sea exploration and production business, has cited potential for an “increasing number of material and attractive opportunities” if the oil-price fall is sustained.

Shares in Longboat, which have fallen sharply in recent weeks in line with the sector, rose by 1p to 69.5p after it issued an update reflecting on “recent world and oil-market events”.

Longboat said it had analysed multiple potential transactions since floating on the Alternative Investment Market on November 28, including “a number of bilateral discussions”.

It added: “So far none of the opportunities to date have resulted in a transaction due to the company remaining disciplined with regards to the company’s underlying technical and macroeconomic assumptions, as was the case when at Faroe Petroleum.”

Longboat declared “the market dynamics have altered significantly in recent days”.

Chief executive Helge Hammer said: “We believe that if the recent fall in the oil price is sustained, it will provide an increasing number of material and attractive opportunities. We have a robust bank balance, low G&A (general and administrative costs), strong industry relationships and institutional support. As such, we are well-placed to exploit existing as well as new opportunities arising from falling oil prices. We expect transaction valuations to decrease and thus potential returns to shareholders to grow significantly.”

Longboat said that, at the end of February, its cash balance was £8.66 million.

It added that its committed G&A expenses were running in the order of £125,000 per month. Longboat noted that uncommitted G&A costs “flex according to the level of activity, notably as regards transaction analysis and the associated due diligence”.