By Scott Wright
BOSSES at Longboat Energy have admitted the spike in oil and gas prices sparked by the Russian assault on Ukraine will make conditions “challenging” in the mergers and acquisitions market.
But the North Sea-focused company said moves by western economies to turn their backs on Russian oil will “further strengthen the strategic case for Norwegian resources”.
Longboat was established by the former executive team of North Sea-focused Faroe Petroleum, which was acquired by DNO for £640 million in 2019. The company reported yesterday that it has made three discoveries from the four wells it has made to date, with the Egyptian Vulture find hailed as material.
And it said it was targeting three high-impact exploration wells in the next six months, declaring that each have the potential to be “transformational” for the company. The result of the Kveikje exploration well, located in a “very prolific area of the North Sea” where it is targeting 36 millions of barrels of oil equivalent, is expected in the coming days.
Longboat reported a loss of tax of £4.7 million for the year ended December 31, which included a write down on the Mugnetind well that was found to be dry.
Helge Hammer, chief executive of Longboat Energy, said: “Longboat remains well-positioned having made one material discovery and another with commercialisation potential from our first four wells. In the next six months, we will have results from three further exploration wells, each of which could be transformational for the business. Furthermore, we continue to leverage our excellent industry relationships and are currently participating in a number of M&A processes.”
Longboat said it was loath to reference the “desperate events in Ukraine” with regard to its outlook, but conceded the war would “inevitably” have an impact.
“In the short term, the spike in commodity prices will make the M&A market challenging for both buyers and sellers, although more so for buyers,” the company said. “Conversely the move away from Russian oil and gas will make the case even stronger for Norwegian resources.”
Shares closed up 5.5p at 59.5p.
“That aside, Longboat remains well-placed to transact. We have an experienced team with excellent relationships across the industry and we believe there are now many excellent opportunities for Longboat to pursue. However, patience will still be required given the commodity price levels and the competitive landscape.”
Shares in Longboat closed…
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here