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Have to agree. Get a move on! £200 million with of acquisition finance is pointless if it’s just sitting in an account!
Share the news on assets being reviewed, early commercial terms, potential takeovers, production guidance (why wait for all the wells to be brought online… given we only have the two minority stakes, an additional well being brought online is major news), Sarawak partner progress… have we invited companies into the data room.
Give us something
New oil provinces being geologically formed whilst LBE creates anything meaningful...
🌋 🛢 😁
Again, tick tock Helge and cronies...
200 Mboe of tight gas.
Fish bones technology is a potential solution to take the recovery from 10-30% upto 30-50%
https://www.fishbones.as/ been proven by equinor, Aker etc.
The mini frac delivered 2.3 MMscf, fishbones could take this to 20x the well rate.
Get after it LBE
Sold at 24.5 weds mid morning back on this pm.
Our small initial Statfjord Ost and Sygna acquisition came from Inpex.
Approx 300 boepd and with the new wells all on streanm this quarter should be circa 600 boepd.
Cost $12.75m or $8.20 per boe giving 1.55 mmboe 2P.
Effective date was 1/1/23
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We have $100m JAPEX financing available and the board has said they could double this to $200m with RBL. Imo it's not impossible for the LBE JV to do a 30 - 40 mmboe P2 asset purchase with a starting base of 10-14,000 boepd initial production which could climb by 20-25% in the following year for $140-$220m effective date price and a significant income stream including a short payback time from the effective date and the ability to utilise a full 5 year term and go again for more assets possibly within 24 months again .
By comparrison for $220m and all this cash wasn't needed in view of the effective date also being 1/1/23.
Okea bought their 4 interests (not long after LBE )n Statford, Statford Ost, Statford Nord and Sygna for $220m giving 13-15,000 boepd, 41 mmboe 2P, 8mmboe 2C and upside of another 14 mmboe.
Production in 2024 this year estimated to be 16-20,000 boepd (though likely reduced by 10% this year.
This was transacted at an initial cost of $5.36 per boe 2P.
However this would expand to a profit share on bls sold between $75-$96 in 2023, $64 - $85 in 2024 and $53 - $72/b in 2025 where Equinor get 90% of the profit in those ranges after tax and effectively increasing the 2P per barrel cost.
==============================
From Okea - Reference
Acquisition of 28% WI in PL037 from Equinor, comprising 23.93123% WI in Statfjord Unit, 28% WI in Statfjord Nord, 14% WI in Statfjord Øst Unit and 15.4% WI in Sygna Unit.
Effective date 1 January 2023
Initial fixed consideration of USD 220 million including tax balances of approximately NOK 300 million
Net 2P reserves of 41 mmboe and net 2C resources of 8 mmboe. Additional upside volume potential estimated to net 14 mmboe,
Adds production in 2023 of 13,000 – 15,000 boepd and expected to grow to 16,000 – 20,000 boepd in 2024.
In addition to the fixed consideration, the agreement contains a contingent consideration structure based on profit sharing on crude oil volumes sold at a realised price of
75–96 USD/bbl in 2023,
64–85 USD/bbl in 2024, and
53–72 USD/bbl in 2025, as well as on dry gas volumes sold at a realised price of 170-341 p/th in 2023, 125–248 p/th in 2024, and 37–75 p/th in 2025.
The profit sharing within these limits is 90% after tax to Equinor and 10% to OKEA
Primed for the next move unto 30?
To follow on from the previous post -
Finally and a crucial point - is the very low CO2 potential at LBEs Kertang which they have highlighted for a reason (Take this in context of Kasawari costs and very high CO2 for getting shot of it (see above) which amounts to near 40% of the gas)
From the LBE presentation again -
* Kertang approx 8-10 TCF (CPR 2019), giant size prospect, updated CPR underway to reflect more technical work, over 200 sq km in areal extent at MMU closure
* Gas clouds very evident (& similar to Kasawari gas cloud), amplitude brights at multiple levels
* Geochemical analysis of sea floor sediments over prospect shows high Methane concentrations & very low CO2 (Fugro 2019)
-----------------------
So with Rystads Energy $3.50 - $5 mcf break-even for Kasawari - that's $21 - $30 per boe break-even (see article above).
My estimate is a $3 per boe valuation to LBE. With a potential 9 TCF recoverable that's 1.5 billion boe.
Retaining 15 - 20% on farm out is some 225 - 300 mmboe or $675m/£500m - $900m/£700m potential target value divided by the current 57m shares or expanded out to 100m re share price potential from Kertang alone - yet has potentially 50% more gas upside from at least 2 other prospects with further 'multiple large prospects' all compared to £14m m/cap now (24p).
This to me is imo more than underpinned by the Norwegian growing production, existing undeveloped discoveries and $100m available financing from Japex for further Norwegian production assets which should trigger further share price growth. Imo/dyor as ever.
If anyone hasn't studied the latest Block 2A presentation - the Kertang 9 tcf mid case recoverable prospect is described as an undrilled giant and on slide 5 it is compared as analogous to Lang Lebah 5 TCF and Kasawari 6TCF. LBE include the reference to Lang Lebah - "Unravelling an abandoned giant" by Aquilah (Amir Jamalullail and others- The leading edge 2020)
https://longboatenergy.com/wp-content/uploads/2024/01/Malaysia-license-SK2A-extract-from-EAGE-presentation-January-2024.pdf
Yet in that article, Lang Lebah lay dormant for 25 years after initial drilling and it was only in 2016 that new 3D seismic and reprocessing was carried out and a new well drilled that made Lang Lebah one of the largest gas discoveries of 2019
https://www.researchgate.net/publication/343411866_Unravelling_an_abandoned_giant_in_Central_Luconia_Province_offshore_Sarawak_Malaysia_-_Success_story_of_Lang_Lebah
"Lang Lebah, located in block SK410B in the South China Sea, is one of the biggest gas discoveries off the Malaysian coast.
The Lang Lebah field is estimated to hold five trillion cubic feet (Tcf) of gas in place.
The field was discovered by the Lang Lebah-1RDR2 exploration well, drilled in March 2019 to a total depth of 3,810m. The discovery well encountered 252m of net gas pay in the Middle Miocene carbonate reservoir.
The Lang Lebah-2 appraisal well, drilled in January 2021, confirmed Lang Lebah as one of the biggest gas discoveries in the region. Drilled to a total depth of 4,320m, the appraisal well encountered more than 600m of proven net gas pay in the carbonate reservoir. The well test demonstrated a flow rate of 50 million cubic feet (Mcf) of non-associated gas a day. The Lang Lebah field is expected to come on stream in 2027 and will produce up to one billion cubic feet (Bcf) of gas per day." (165,000 boepd)
https://www.offshore-technology.com/projects/lang-lebah-field-development-sk410b-malaysia/?cf-view
Kasawari - "Discovered in 2011 offshore the Malaysian state of Sarawak, the Kasawari sour gas field is today a symbol of Southeast Asia’s energy challenge.
Petronas is eyeing next year for first gas. By 2025 it hopes to see 900 MMscf/D (150,000 boepd) flowing from the field to its sprawling Bintulu LNG export facility on the Sarawak coast.
The scale of Kasawari, found at a water depth of about 108 m (350 ft), is a result of its ranking as one of the most CO2-laden gas fields planned for development globally. When wells are flowing, it’s expected that up to 40% of what will come out will be CO2.
New research from Rystad Energy suggests that the capital inputs required to add CCS to Kasawari will hike the project’s breakeven gas prices from roughly $3.50/Mcf to more than $5.00/Mcf. "
https://jpt.spe.org/what-you-should-know-about-offshore-and-sour-gas-ccs-high-cost-leak-mitigation-and-transportation
@zengas : excellent summary of potential here. A reminder why I am invested. My comment was more rhetorical question why the share price suddenly moving now. Would agree that 40p a fair price based on progress to date (Japex deal, Stratford production, Norwegian discoveries and Malaysian potential)
All the below plus free carries on drills off Norway starting in 6 months. And a possible extension of the carmen discovery off Norway in the block adjacent. Plus Carmen possibly leaks over to our block.
Mental value to be had if you see the wood through the trees
Nothing to do with leaks imo but the fact of the assets it has added as well as the super deal with Japex in Norway and that investors are waking up to it. It is and was very oversold plus the the low available free float which i highlighted.
The M/cap at 25p is £14m m/cap and is a producer on it's existing assets which will soon have paid for itself as well as expecting to double production on those.
It has $100m of available Japex funding for acquisitions in Norway. Use some of that for Norwegian production acquisitions (expected) and will further transform the company.
It has also underestimated play opening discoveries in Norway with major partners.
It has a world class exploration block off Sarawak with multiple large prospects.
The block has 6,000 km2 3D seismic which would cost a fortune to replicate and at least $20m - or more than the current m/cap.
Kertang is a world class 1.5 billion boe recoverable estimate (9 TCF) drill ready prospect DHIs, gas cloud, significant methane measurements.
Two smaller adjacent prospects about half the size each may add 6 TCF to this so imo a target potential of 15 TCF.
Those 3 are covered by 2900 km2 3D.
Farming down from 52.5% to 15-20 % could yield $ 1billion of value.
57m now or expanded to 100m shares at £4 = £400m/$500m
With still further structures.
Also intending to pick up producing assets in that region seperate to Norway.
By comparrison - Upland (UPL) in the same Malaysian region, no production, financial backing, no 3D and unknown stake in a PSC block not even awarded yet, no recoverable estimates and nothing else of value on 1.2 billion shares and todays share price of 3.3p (recently 4 and 5p) = £40m m/cap and nothing else to underpin an entry price.
Fair starting value for LBE would and should be 40p which is only £22.5m and on the above looking for north of 100p from Norway in growth (ie barely £60m) and a potential future target as above of value on a success case on Kertang detailed above.
Doesn't take much volume to move price here.
The obvious question is why this is suddenly motoring now?
News leaked of incoming deal?
Despite the lack of progress over the years and that I'd bottom drawered these, I'm thinking top up on this sudden movement in sp.
This is after me thinking I'm not putting a penny more in lbe 🤷♂️🤷♂️🤷♂️
-- BB --
This will absolutely fly on any significant news
Nice one! Not a bad day here. Blip in the ocean though compared to what could be on the horizon with acquisitions and Kertang!
Looking forward to the updated production guidance!
After months of sideways action between 17.5p and 21.5p could this be a next leg up?
Okea AS went ahead and completed their acquisition from Equinor in the Statfjord Unit as well as Statfjord Ost, Nord and Sygna.
'The Statfjord Area comprises the Statfjord Unit, Statfjord Øst Unit, Statfjord Nord and Sygna Unit. The Statfjord Unit development covers the Statfjord A, B and C concrete gravity-based platforms. The other fields are subsea developments tied back to the main field platforms.
Statfjord Area is one of the largest fields on the NCS in terms of initial oil in place which was in excess of 6 billion barrels. Statfjord A was put on production in 1979, followed by Statfjord B in 1982 and Statfjord C in 1985. The field is operated by Equinor and the Field Life extension (FLX) unit was established in 2020 with an ambition to deliver 200% increase in remaining reserves, 25% cost reduction and 50% CO2 reduction in the Statfjord Area by 2030. The FLX unit focuses on safe operations, improving recovery from the field as well as reducing costs and CO2 emissions and has a strong track record of deliveries in recent years.'
As LBE partners Equinor, VAR, DNO etc most of the existing discoveries made are close to existing facilities and some of those at the lower end of the threshold may yet come on to the development stage or swap in the future, but that is where all these companies have a major focus similar to the details in the Equinor transcript.
Kjetil Hove Equinor ASA - EVP of Exploration & Production Norway
In addition to the large sanctioned project portfolio, we have an even larger number of non-sanctioned projects. We have more than 30 projects that we are maturing towards investment decisions in the coming years. The projects are in an early maturation phase, but we expect an average breakeven of the portfolio of around $35 per barrel and a payback time of around 1.5 years. For many of the new subsea tieback fields, we are looking into new ways of working to reduce the maturation and execution time with 50% and the cost level of at least 30%.
This will reduce the breakeven from these fields with 30% compared to a more standard subsea development. And this will be done through new technologies such as the Cap-X subsea wells and by taking out portfolio synergies. These projects will give us around 350,000 barrels in production after 2030
In addition to the large sanctioned and non-sanctioned project portfolio, we are working hard to increase the recovery factor from our fields. Historically, we have been, since sanctioning, been able to increase the average recovery factor from around 30% to around 50% from our oil fields. And there is still a large remaining potential in our fields, and we plan to deliver 50 to 70 increased recovery wells annually in this decade.
Many of these wells are using new technologies such as retrofit multilateral wells, multi-stage fracking and advanced completion solutions, reducing the cost and increasing the production. And these are highly profitable barrels with a breakeven of around $20 per barrel and a payback time less than a year.
We're also planning for around 300 interventions annually to increase production from our existing wells. And in addition, for many of our late life assets, we are planning to sanction low-pressure projects to reduce the reservoir pressure and thereby increasing the recovery from our fields. This increased recovery effort will give us an annual production of around 150,000 towards 2035
Our exploration strategy is that around 80% of the exploration wells will be drilled close to the infrastructure in known exploration plays. This is normally low-risk exploration with high probability of success. And new discoveries can be put on stream quickly since they will require limited new infrastructure.
The remaining 20% of the exploration wells will be drilled in new plays, still quite close to our infrastructure. These are higher potential wells but with somewhat higher risk than the pure infrastructure-led exploration targets. These wells can open new plays also in known areas such as the Kveikje, Heisenberg and Norma discoveries during the last years. Discoveries that you may not have heard about, but you should not underestimate them because there are many of them, and these could open new plays with large potential on the NCS.
Potential is great i agree but thats all the BOD have delivered to date, potential
Chart wedge ready to move n
Great post Deeko19, 2024 has real potential and I’m patiently waiting to see how it unfolds for LBE, major catalysts, firstly in Norway, the JV with JAPEX has to deliver something significant, they have the funds available. Worth noting that JAPEX are having a very good year and their shareprice has hit record levels, lets hope that some of that confidence gets passed down with a bold acquisition.
Then there’s the Malaysia block that has the size and potential to get the majors interested, a JV with a major player will add significant value for a £10m company.
Absolutely agree PaulD.
Personally i simply want cash flow and they haven't delivered.
The below is of course all speculation based on getting the results we all desire but the blueprint is there, just need stars to align