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Did you sell out Paul? I remember you saying a couple of years ago that you held quite a chunk? As did mozzabezza, not heard from him for a while either..
I'm still here, in from 70p in 2020, have averaged down quite a bit since then.
I'm comfortable waiting, believing they've finally got themselves in the position to do well from here.
Share price performance has been disappointing for sure, but I don't put all the blame on the company. I believe the pandemic changed the market completely. Pretty much all deals where shelved initially, there was hardly anyone wanting to sell when the oil price was so low/unstable, not in Norway anyway. Then PE leveraged cheap money massively, which skewed the market dynamics as the market for M&A began to come back. The share price has not recovered from the II sell down, I guess it's whether one sees that as a buying opportunity. But if you don't believe in the management, as you clearly don't, then I guess you see no upside from here.
It’s not putting words in your mouth, it’s what you’ve said!
Like it or not Zengas, Longboat Energy has been nothing but a failure so far. The share price has dropped from £1 to 16p which should tell you everything you need to know but for the benefit of others I shall provide the history.
Longboat launched with the objective of securing production assets in Norway (predominantly gas). When the pandemic hit and energy prices dropped significantly they tried to negotiate too hard and subsequently lost out on doing a deal when commodity prices were at historic lows (no foresight).
After the pandemic energy prices spiked which meant the Longboat management were definitely now unwilling to pay the market prices for production assets. They ended up instead getting desperate and securing a portfolio of exploration prospects, boasting at the time that Norway had a 50% success rate at exploration and these prospects were carefully chosen by their expert technical team. Well that technical team turned out to be utterly useless - out of 10 prospects (Rodhette, Egyptian Vulture, Mugnetind, Ginny, Hermine, Cambozola, Copernicus, Oswig, Velocette & Kveikje), only one of them found commercial hydrocarbons. Their technical team would have had better success throwing darts at a wall - 10% success compared to an industry average of 50%. The only successful well had an over 50% CoS as well!
Having wasted all their money on a failed exploration programme it’s no wonder several of their institutional investors wanted out and weren’t prepared to back them further.
They were between a rock and a hard place but thankfully managed to do a deal with JAPEX and they have now secured a small production deal but even that has had cost overruns that would have been disastrous had JAPEX not come on board.
Now I’m not saying they can’t go on to be successful, and I’m hopeful that they can. But don’t kid yourself or others, it’s been a total disaster thus far.
You can disagree all you like but the market agrees with me, hence a share price of 16p despite the Kveikje discovery & nearby license area, the JAPEX deal and the Malaysian exploration prospects. Sentiment is in the toilet and for good reason.
Sorry Paul, contrary to what you try to put in peoples mouths, No.
You like to think you what you write is correct without checking facts and it's why i don't give you any credit in knowing what your talking about.
As someone who is 'new here and it shows' as you put it, let me remind you that without any fact checking on 1st Dec you stated our second biggest holder was out when in fact it was a transfer within the same group that i pointed out.
So what you’re essentially saying Zengas is that the Longboat management started the company with the aim of acquiring production assets, only to realise afterwards that they could not compete with private equity after setting it up and needed the JAPEX deal to be competitive.
That would mean they were totally incompetent from the start.
Maybe you’re right!
Well fyi Paul i've followed LBE since day 1 regardless of whatever being so called 'new here' to you somehow means. Maybe i just like the raft of new assets and Japex deal more so than you can see from your experience to date. An absolute shame that other investors such as myself come aboard and find this an attractive proposition which after all is needed given you're so far down from 100p to 16p.
Finally you now say 'you don't know the specifics of them' (deals to be done). Exactly you don't know other than your emotional reaction to try and explain it.
Well if you know how SVAL grew, you'd know it has no relevance to LBE in bringing it up as some sort of comparrison in the first place as it is a private equity created company by HiTech and should realise how the private equity influence on deal competition works and how others can be pushed down the food chain. Of course there are deals to be done but you'd have to bear in mind that for some sizeable deals you'd need to win through to preferred bidder status and why imo we've only had the small acquisition to date but hopefully 1,000 boepd to be achieved in the next 8 weeks.
It's why now they can say that the Japex $100m financing can give them the firepower they need along with potentially doubling that amount on RBL to get bigger and better deals - isn't that the point and why some were asking why were we bothering with small 300 boed deals (not so bad now as it approaches 1k boepd) but now also producer status.
If you still don't understand or seen the competition of PE re deals in Norway then there's a clue about S.E Asia where they say 'Private Equity largely absent' and 'Key competition from smaller and/or domestic entities'.
You’re new here and it shows Zengas. Don’t attempt to give me a lesson on it, I know the LBE history only too well.
Read back through the reports and listen to the old presentations - the board have admitted there were deals to be done although obviously I don’t know the specifics of them.
I know exactly how Sval Energy grew and I’m not saying that Longboat could and would have grown to the same extent, but they were making acquisitions at a time when you appear to be claiming there weren’t any to be done.
Paul, no disrespect but you don’t have a clue what you are talking about re Sval, deals or private equity.
I asked you for evidence of your claims on deals to be done for lbe, instead it’s met with a nonsense reply.
Don’t you understand how Sval was turned into ‘a billion dollar company ‘. I doubt it .
Zengas on the one hand you are suggesting there were no deals to be done, and on the other admitting that Sval have turned into a billion dollar company “through a series of acquisitions” during exactly the same time period.
Simply saying they can’t compete with private equity is a poor excuse.
How can you remotely compare Sval Energi to LBE in that time period and to date since it is a non listed private equity backed company.
It was fully funded by Hi-Tec Vision involved in takeovers and acquisitions to reach material size/self sufficiency that HiTech is now selling.
LONDON, Jan 19 (Reuters) - Private equity firm HitecVision plans to sell its Norwegian oil and gas producer business Sval Energi in a deal valued at up to $1 billion including debt, four sources said.
HitecVision established Sval in 2019 and the company has since grown through a series of acquisitions, including holdings from Equinor EQNR.OL and Suncor SU.TO.
Sval produces around 70,000 barrels of oil equivalent per day from stakes in 15 Norwegian fields, and has four development projects, according to its website.
The sale is expected to raise several hundred million dollars which, together with its debt of around $700 million, values Sval at up to $1 billion, according to two sources familiar with the sale process. Sval and HitecVision did not respond to requests for comment.
https://www.nasdaq.com/articles/private-equity-backed-norwegian-oil-producer-sval-energi-up-for-sale-source
You say there were deals to be done ? so name which ones ? and where ?.
Management weren't up to it ? - On what basis ? Competing with PE maybe ?
You say the market has zero confidence. I bet to differ. If so Japex and it's major shareholder ie the Japanese Govt, would not have done a deal with LBE barely 10 months ago. Incidentally this has actually the kind of step change financing that Hi-tec provided.
As a listed company we are at the sentiment and whims of PIs more so than the rest of the core investors who won't see the bigger picture especially now as to what is in place. The low free float exacerbates both the share price movement on both buys/sells when it could move 10% either way as in recent weeks on little volume.
https://hitecvision.com/investment/sval-energi/
Sval Energi was established in 2019 with the aim of building an energy company with a broad asset base. Currently, Sval holds interests in Gassled, the world’s largest offshore gas transmission system, and in the Polarled pipeline; the company participates in the exploration and development of oil & gas fields; and owns a wind park development in Finland. As a new generation energy company, Sval sees the need to reduce the industry’s carbon footprint, the world’s need for clean energy and also recognizes the profitable business opportunities that arise in the ongoing energy transition.
Case responsible John Knight
Zengas, have a look at what Sval Energy have achieved during the same time period.
There were deals to be done but the LBE management weren’t up to it.
The share price is 16p because the market has zero confidence in them. Should they put the JAPEX funds to good use I will be both pleased and relieved, but the first 5 years of Longboat’s existence have seen nothing but the erosion of shareholder value - that’s a fact.
I'm not opening the bottom drawer for a measly quid. I'm aiming for at least a fiver.
The problem for lots of us though, Scoreagain, is that opening the bottom draw when/if they are £1 will still leave us in the negative. That's how poor the company has performed.
I invested on that original strategy so I'm still hoping for a decent material production purchase.
Lbe is one for the bottom drawer open the drawer when lbe is 1 pound .There partner see valued so do i
Paul yes, but like it or not in the absence of deals (13/3/20) this ended up an exploration play at the time despite its full cycle strategy.
13/3/20 - ie 1 year after listing -
"Longboat will focus on 'near field' exploration with access to infrastructure and de-risking through nearby discoveries".
From admission to this statement and into April 2021 the share price was in the 100p range so on this strategy if it wasn't what anyone had planned for there was ample time to change ones own investment strategy/risk.
What proof do you have with a comment that' they bottled it' on assets - What potential good deals were on the table and access to cash for financing ? None of us KNOW what competition was faced in or around any deals and if they were ultimately good or not in the long or short term re pricing and if the goal posats were moved mid deal.
The farm in process (75p) to the exploration drilling was 1 June 21 - 2 years after the company was set up.
We had 6 discoveries out of the initial exploration wells some of which have opened major plays. While some on the back burner they may yet be tied in re Satellite developments in the future. Kveikje one of the biggest discoveries in that period - so to me it demonstrates that they get in on the right prospects with partners for discoveries and i expect more farm ins of that type.
It was in Feb 2023 that it then broadened its remit and likely in talks long before this with potential partners on a JV.
In the last 12 months it has put in place the
1) Japex deal $100m and possibly doubling with RBL.
2) Acquired the initial production assets now expected at circa 1,000 boepd v 300 at the SPA with a 600 boepd guidance post drill by the operator.
3) The largest undrilled giant structure Malaysia/Sarawak with 1.5 billion boe recoverable potential and a range of very large follow on structures in the block that is now in a world hot spot surrounded by majors like Shell, Total, Connoco etc.
That all didn't fall into their lap. Time, negotiation and effort.
Likewise why i expect the next deals will build the company much bigger in both jurisdictions.
Stop and think about this;
Longboat will produce 1000 barrels every day by June. Not only that but, 80+% of the capex we have paid out for the gas lift project will be paid back to us next year by the Norwegian government.
Zengas it was never supposed to be an exploration play - that was not the original strategy but they bottled doing a deal during the pandemic and then energy prices spiked leaving them nowhere to go.
You say it beggars belief but £1 to 16p tells you all you need to know.
Great summary ZENGAS. Also, oil at $91.
Said this time and time again but this is another Serica. I was in at Serica when Erskine was producing 2000 boepd yet the market just didn’t recognise the value. Easiest 200/300% I ever made, then the big acquisition came and suddenly everyone wanted in.
IMO you capitalise on times like this when the share price is on sale.
I invested at the outset, but you have to bear in mind it was an out and out exploration play back then (as for that matter UPL is now).
For all that, LBE have still made a number of discoveries from that early strategy which the partners are saying you mightn't have heard much about them but they are of importance and will hear of them as development plans for them grow.
I also bought in on the new strategy.
The ridiculous comments about everything they've touched has gone bad beggars belief.
The Japex JV $100m financing deal with the possibility of doubling that via debt rbl financing.
The Initial acquisition of 300 boepd which we were waiting on reaching 600 boepd. The delay was outside our control when we are minority partners. I don't hear many picking up on the expectation that it should now reach circa 1,000 boepd which would be 66% upside to our initial conditioning. The Operator has said there is potential to increase the RF = reserves increase but i'm sure this is all lost amongst the moaning and those who don't see what has been put together.
They've landed one of the biggest undrilled blocks (52.5%/2A) with a whopping 50% 3D coverage that would cost $millions with multiple large prospects. Just one having 1.5 billion boe recoverable estimate with the rest potentailly adding up to a multiple of that imo. There's about $500m - $1b of possible value (ie c $3/boe on 150 - 300 mmboe on a remaining 10-20% post farm out for Kertang alone if that size discovery is found, with other structures as a future follow on.
Upland languished at .2 then .4 of a penny for 5 years and now with it's Sarawak block, half the size of ours, still not awarded but expected, no 3D, no recoverable estimates and no known net perecentage share to them - yet now at 4.3p today and 4.7p recently on 1.211 b shares = £53-£57m m/cap and about another 150m cheap warrants still to dilute, little cash and crucially not enjoying any income whatsoever.
As for us picking up a a so called small interest. Aet picked up a similar sized producing interest from Ina of barely 150 boepd but it's what you do with them. They languished at under 10p or £22m m/cap and have picked up 3 debt funded interests under a new strategy that took time to execute and are not far of £100m m/cap at 47p today.
At current prices and short ramp up timescale there should be $25m - $28m JV revenue on that 1,000 boepd.
If they can add the right deal on the financing available they could be a 10,000+ boepd producer in Norway. That has to be passed by Japex too what they want to approve not just LBEs management.
A mention that they could land some Sarawak fallow offshore shallow water existing discoveries for development at no cost which imo could add considerable 2C and reclassified to 2P on a dev plan so that's a major one to watch as that team/region has to justify it's formation and growth over an above just block 2A - which will be a second growth arm.
Fair enough. Been there too!
I really can't face losing so much by selling at this stage.
I also appreciate the disconnect in the current sp.
In short, would I buy I3E at 100p? Absolutely not, is there major value at 17, 20,25,30,35,40? absolutely
Ash, why not sell up and move on? I’ve done it serval times before and made multiples back. Tullow being a good example. Bought at 7p sold at 45/50, bought back in at 37 sold at 27 and moved on to I3E at 10p to sell at 28p.
Why wait around if you don’t have any faith they can deliver? Let’s be honest too, they changed strat when Japex came in and have only had 100 million financing for less than 9months.
You can’t say it’s been 5 years for a production deal because they were buying into exploration wells initially and Did so successfully. Unfortunately nothing major came in but they’ve refocused to the Kveikja area now which I think is a wise decision.
Paul "They’ve been “actively participating” in deal processes for 5 years now".
This is my very point and concern, particularly those of us who invested from the outset! We've seen all sorts of oil price cycles fly past without delivery on the organisation's strategy to invest in production.
Yes they are.
600 bopd
800 bopd from may
1050 bopd from June
You can find the latest investor presentation on YouTube
Please can someone clarify if they are actually in production now. I think it says in yesterday’s update 600 boped but revenue was zero for last year. Which I understand because if the are in production any revenue will fall in to this year.