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Welcome back haggis, let’s hope you’ve timed it well!
Mozza I didn’t get a reply to my email either - I might be on the black list now because I was a bit critical(!) but I wonder if they’ve given up on investor relations entirely now!
The AGM is probably our only hope of clarification, but I won’t hold my breath.
Right - that is me back into LBE for a modest amount...
Patience required here, so taking a longer-term view of 2-3 years. If board achieve the stated aim of creating a mid-cap oil company then the upside potential is huge from 77p. As world recovers from covid it is inevitable energy demands will increase as the world sees one final oil-boom before transition to greener energy : so the timing could yet be perfect.
Norway is certainly the right environment to be attempting such a venture in current political and economic climate. No doubt the next 18 months will be more exciting that previous period. Exploration more risky than production - however Equinor are a solid partner with good track record - plus there are lots of clues (job adverts etc) that other deals are in the making. Feels to me like LBE remain under the radar for now but excitement will increase towards autumn. An early strike from first or second well would be fantastic to under pin confidence in the strategy and share price.
Good luck all!
I completely agree, Paul.
The PR really needs to be there, because right now they seem to be operating as though any shareholder engagement is a disadvantage to them. Notably, I haven't had a reply to my email (not that I was particularly expecting one) with questions in re. still pursuing production deals).
These fields have expected production dates (from the admission document), starting in 2025, so I think that the intention here must be to prove up resources and then swap them as they did previously at Faroe. It's notable that they nearly all seem to be near to fields where Faroe had production or exploration interests, so my guess is that they would try and swap into production.
In the meantime, I do think that they need to be very clear about the kind of deals they are pursuing now - are they production or exploration and development.
Most of us bought in here pre-RTO on the basis of seeing the firm buy cashflows and I think in-light of how much the firm pushed that narrative, we deserve to know if that is still on the cards.
Well given the lack of new licensee/operator approvals in Norway recently (only 11 in the past 4 years), when Longboat get approval they should be in an increasingly rare position to take advantage of opportunities as and when they do arise.
It would be nice to hear from them though. Volume has dried up already within a couple of days of relisting, and whilst that doesn’t really matter to them or us, with another 46.7million shares hitting the market in a couple of weeks it would be good to see some PR. I know I said that before but maybe I’m being naive and this company doesn’t really care as long as the institutions are informed and happy.
"See to Duty" does not come cheap...we are there...we had to be there!
Well they seem to be gearing up in terms of staffing costs for more than a bit-part role in a few exploration wells.
Yearly salaries/fees are as follows:
Directors/Management:
Helge Hammer: £300,000
Jonathan Cooper: £250,000
Graham Stewart: £103,750
Brent Cheshire: £70,000
Jorun Saetre: £50,000
Katherine Roe: £60,000
Nick Ingrassia: £230,000
That's £1,063,750, plus Julian Riddick whose salary/fees don't seem to appear in the Admission Doc.
Plus 4 current staff:
Synnove Roysland (Drilling & HSEQ Manager)
Morten Rye-Larsen (Exploration Manager)
Per Torfinn Knudsen (Petroleum Technology Manager and BD Support)
Line Veiberg (PA & maternity cover for Hedvig Kleppa).
And a further 10 being recruited:
Senior Geologist
Senior Geoscientist
Senior Reservoir Engineer
Senior Accountant
*Plus 6 others as yet unknown to us.
If those 14 staff are on an average of £50,000 a year (and I suspect it will be more but let's be conservative), that's £65,000 after tax, insurance, benefits & pension contributions etc so a total of £910,000. Plus Julian Riddick.
Then there are the fees for consultants (currently visible on Linkedin are Ludvig Hovring & Ciaran Nolan).
They are going to end up with a wage bill of well over £2m per annum (possibly £2.5m-£3m) which is a lot for a company with a market cap of only £42.5m.
That's before all the other corporate costs so their outgoings are going to be significant.
I know they require a certain amount of technical expertise to meet the Norwegian licensing rules and 'See to Duty', but these salary increases, recruitment drive and eventual staffing costs hopefully indicate that they expect to be growing the company and market cap quite aggressively from here.
So hopefully an economical exploration strike(maybe more) coupled with a production acquisition before the year end to make the perfect catalyst to get this party well and truly started and set LBE on its journey to become over the next 3-5 years a significant North Sea- focused E&P business.
Agreed - over 80% of the admission document is boilerplate stuff - definitely will be used again when the executive team are happy - and we know finance will be straightforward! Best of Luck
Yes the more you look the more you realise this deal has been in the pipeline for a long long time.
I think this (below) is key too - what assets are non-core to private equity backed vehicles in Norway at the moment? Or even the U.K. North Sea because that’s still getting a mention:
“Many majors have continued to look to reduce investment in the North Sea and as a result of rapid acquisitions, and there are a number private equity backed vehicles holding assets that are non- core to their businesses. The Directors believe that many of these non-core assets can hold significant value for companies like Longboat Energy, which can focus on unlocking intrinsic and upside value, thereby benefitting both parties in a transaction”.
I'm hoping at the AGM they can confirm that they're still in discussions re. a production deal.
The wording in the last results set was:
"The impact of these [tax] changes allows Longboat to now consider modest exposure to Norwegian development assets in combination with a production acquisition." "The Company's core strategy remains unchanged"
Well, and this is entirely speculative, maybe this is the exploration part and that they were forced to get this one out because of the timings from the partners.
They've obviously been working on it for ages as they had an admission document up their sleeves and these usually take a few months.
Now, if that's the case then we'll be able to work out what production deals they might be looking at by going off the near field infrastructure to this deal.
We should be able to get a confirmation at the AGM I reckon re. further deals.