RE: LBE18 Jun 2024 00:39
Posted by WhirlawStones
Malcy's take on things:
"So pick the bones out of those two announcements this morning as Longboat, remarkably quickly after the recent news that Norway was proving to be somewhat less than profitable, and that its South East Asia portfolio was the future. The way that it has been done is pleasing, the company could not find any reason to stay in Norway and if they had stayed in what was a deteriorating situation there was no guaranty that they could have got out so cleanly.
Longboat has sold its 50.1% interest in the JAPEX JV for $2.5m in cash but importantly taking with it the share of the debt which adds $8.5m to the total making an $11m exit purse. As a result in one fell swoop the board has wiped the slate clean in Norway and is now preparing for life as a South East Asia focused hydrocarbon play.
And what now, well the good news is that there are the makings of a pretty handy portfolio of assets tucked away under the watchful eye of James Menzies who is somewhat of a legend in the area and has the optionality to make something really rather good out of what he starts with.
The jewel in the crown is obviously Block 2A where they have a 52.5% operated interest in this offshore Sarawak located area in eastern Malaysia and in which the ‘giant Kertang prospect’ is located. And this is indeed a jewel, we are told that ‘multiple large companies have approached Longboat’ with interest, accordingly a farm-out process will take place in H2 2024.
In addition to this, Longboat has also potentially an interest in shallow water Sarawak ‘containing several material, undeveloped gas fields capable of near-term development’. These, added to 2A are really excellent starting blocks for the company and as they have said, an important addition to the Asian portfolio.
The speed with which Longboat has got to grips with the Norwegian problem, cut a deal to sell and move forward has been very impressive. Fortunate maybe, in having 2A and Mr Menzies to call upon but I can’t think of anything or anyone better to lead the company going forward.
I have said twice now that investors should not hang around in reassessing and deciding to invest in what we should call ‘New Longboat’, with a CPR imminent I have a feeling that there is lots of upside here and maybe quite quickly too. "
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