Five down, three discoveries and two wells to go.
Longboat Energy's (LBE) seven well exploration campaign is entering its final phase and the recent discovery at the Kveikje exploration well, according to chief executive Helge Hammer, "Came in really on the positive side above expectations. It’s an excellent reservoir, it’s a very significant size and in a real sweet spot in a Norwegian continental shelf."
He draws comparisons to last October's discovery at Egyptian Vulture with important caveats. Kveikje is, says Hammer a much better understood discovery in terms of the reservoir and oil quality and is an asset that is more readily tradable. However the company is not in a rush. "We’re very focused on value. That may involve a swap, a sale or we take it forward to development." Plus a favourable tax regime in Norway would make Longboat operatorship of Kveikje an obvious option.
Circling back to Egyptian Vulture a decision about its future and how investment is apportioned is scheduled for a late May, early June decision.
The focus is now on the final two wells of the campaign. There's cash in the exploration budget plus a bit of headroom and Hammer describes them as exciting. "They are very big. If they come in they will be incredibly significant for us."
He says Cambozola and Copernicus are both very well mapped exploration prospects based on extremely high seismic data. "The next well Cambozola we have 25% of, and that could be a tcf of gas and so that could be incredibly significant if it comes in. It could be a company maker and likewise with Copernicus."
Energy security and the acceptance of gas as a transition fuel have reinforced Longboat's business case. "The opportunity," Hammer concludes "Is fantastic."
Longboat Energy (LBE)