Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
This maybe wishful thinking on my part, but I lean more towards Paul's assessment.
Mainly, because I think it would be quite hard to get the institutions to sign up to a major change of plan like that when they would have all been in thr IPO in the basis of the cash flows.
That being said, I'd much prefer a production deal over an exploration/development deal, so I may be clouded in that respect.
True Whirlaw but that report also stated that the company âis targeting an initial acquisition that will deliver asset(s) that are able to meet its investment criteria (including near term cashflow)â.
The first bullet point of their investment criteria was:
â⢠producing and/or near producing assets, providing cash flows to fund organic growth with robust economics, sustainable in a low oil price environmentâ.
Exploration assets via farm-ins and APA applications came second.
Also in their presentation business summary they stated:
âProduction remains a focus - also pursuing attractive Norwegian opportunities in the exploration, appraisal and development areasâ.
So whilst I think youâre absolutely right that they are looking at exploration, appraisal & development, I would be surprised if the first deal doesnât include some form of production and cash-flow.
This extract from the recent Annual Results statement make it pretty clear that they haven't seen value in deals so far in 2021:
"The activity so far this year has been dominated by buyers who seem willing to bid for assets at a level that would not meet our investment strategy.â
This extract from the same statement suggests first significant news we will get will relate to acquisition or farm-in to exploration, appraisal and development.
âIn Norway, temporary tax incentives have resulted in continued high level of exploration drilling with many development projects now being planned. Exploration drilling results in Norway have remained very strong, including two excellent discoveries by ConocoPhillips in the second half of 2020 and two significant discoveries by Equinor in the first months of this year. In consequence, we see attractive Norwegian transaction opportunities in the exploration, appraisal and development areas, and some of the processes we are currently pursuing involve potential exploration farm-ins. Accordingly, we have included the acquisition of exploration assets as an integral part our investment strategy.â
With the current tax incentives, it seems to be a sensible solution to me, and I'm happy for them to be getting on with this, whilst they also wait for the right production deal to come along, which could still be months away.
(oh and of course there is going to an extension agreed daveri007!).
I think Equinor operate something like 70% of the assets oil and gas assets in Norway, so it makes sense that Longboat wouldn't need this, as they'd only be likely to afford minority interests in any of these fields we think/suspect they are looking at.
Fingers crossed we hear something from them soon! I just hope any deal is done on good terms relative to the IPO price of 100p.
We will all know in a couple of weeks or so - if no extension is agreed we know there are no firm deals in the pipeline - the LBE institutional investors will for sure be updated - unfortunately us retail investors will be the last to know - still v.confident but GLA
The other point I would add is that if you have a look at the first link again (which appears to have been updated since yesterday):
https://www.npd.no/en/facts/production-licences/pre-qualification/
You can see that there are two options for this pre-qualification process - one for a licensee and a separate one for an operator. The applications for operator are denoted by â(Op)â after the company name, which Longboatâs does not have.
If this process was to enable them to participate in the licensing round then Iâm guessing they would be applying to be operator of any license theyâre successful in applying for (at least to begin with anyway). As itâs an application to be a licensee instead, perhaps itâs a sign that theyâre expecting to be a smaller partner in a license which already has an operator (which is probably what we were expecting anyway).
I do agree with Whirlaw that they will want to participate in the next licensing round but I think this may be more to do with them getting their ducks in line for a deal.
Iâm just musing really! We only have breadcrumbs to go on but theyâre better than nothing!
âThe authorities will normally expect new players to develop an organisation as described above within 12 months from a swap or award of the first participating interest in a production licenceâ.
On that basis Iâd say itâs another positive sign that Longboat are recruiting now. They could have waited until after the award of a new license before doing so if they are relying on the licensing rounds. Also, the next licensing round in Norway hasnât started yet, and outcomes wonât be known until next year so maybe this is more to do with a license they are looking to enter via a deal rather than through the application process?
first time I have looked at LBE without a grimace in over 6 months
thanks knokke
Yeah good spot knokke.
My take on this is that it is to do with pursuing exploration, appraisal and development. I thought the new hires were likely to do with preparation for the upcoming licensing round, and your second link appears to confirm this.
News of a production deal could come at any moment of course, however this is Longboat doing something (E&A) in parallel to the M&A deals they are looking at, a plan which is spelled out clearly in their most recent presentation, as you rightly point out. Cheers
If you have a look at the second link that explains the rationale and what type of team is needed, then have a look at the end of March presentation again, it makes understanding some of it easier and fits things into place. You guys are so far ahead of me in terms of understanding the sector, it'll be interesting to see your thoughts
Great find indeed! Does seem to suggest that something is going on.
Thanks knokke - good find.
Perhaps a signal that progress is being made. Hope so anyway.
https://www.npd.no/en/facts/production-licences/pre-qualification/required-organisation-in-norway/
https://www.npd.no/en/facts/production-licences/pre-qualification/
New companies undergoing evaluation
The following companies have applied for pre-qualification either as a licensee or as an operator (Op) on the Norwegian shelf:
JAPEX
NCS E&P
RN Nordic Oil (op)
Edge Petroleum
Horisont Energi
Antares Norge
Longboat Energy Norge
M Vest Energy (op)