I personally don’t see a placing here right now.
I think debt will be used to cover the short term deficit.
Really interested to hear what the board have to say on the 27th.
Worst case scenario (which I don’t foresee btw) is we raise a placing at let’s say 50 million shares. Taking us to 100 million’ish.
At that point, JV is self sustainable and generating gross revenue of approx $31 million a year.
Let’s assume the Mcap of £15 million on rerate (still well below fair value). That’s a share price of 15p or 100% from this abysmal level.
Given that there would have to be a rerate of the share price once funding is sorted and PI’s always get the crappy deal. Id suspect it would be a placing to institutions only and at a premium to the price right now. Maybe 9p-10p?
So 50,000,000 shares raised to provide £5,000,000 cash which in theory would cover the suspected short fall and a share price of minimum 15p.
Again personally I feel any funding will be via short term debt facility but if there is a placing. I’ll try to take part because it’s free money based off the rerate that would have to happen.
Agreed Jungmana.
This was way undervalued even at £0.2 and a Mcap at £10 million.
For the assets we have a Mcap of £20-35 million is much more realistic price for right now. Which would be a share price £0.36-£0.62.
IMO Longboat need to be updating the market with revenue figures from Statfjord. Seen lots of companies release this monthly to remind the market the asset is brining in money.
CPR of Kertang, Farm out partner and drill date confirmed takes this to £50 million Mcap. DRO award in Sarawak is again a massive value propositions based off the DRO’s I’ve seen awarded previously which includes discovered fields and even fields that have current production.
Also agree that the DRO is ridiculously value accretive - how do we pay for development? Revenues from Norway IMO. The two go hand in hand.
Kertang is a monster. My guess is that once we get CPR we’ll soon be followed up with a farm in partner - highly likely a major that has space in a rig schedule (Total or Shell, could also be Conoco).
I just look at upland resources which have an asset in Malaysia well below the quality of LBE’s, with no 3d seismic, no CPR and no expected reserves and wonder how are they sitting at £40 M Mcap and we’re sitting at 1/10 that.
Ohh yes, terrible PR and even worse Regulatory news published. Crazy but the value is here for the taking.
Again, I don’t agree that they’ll give up on a revenue source.
I do agree though that Longboats focus, as a company will be Malaysia. The JV in Norway is soon to be self sufficient with HH and co taking up the reins there to focus entirely on that.makes sense given he has no connections or experience in Malaysia.
To put it in perspective, Kveikja, Kjottkate, Magnolia will easily contribute 7,000 boepd at the current equity stakes. These developments will easily be 20,000 -30,000 boepd fields initially.
Whilst acquisitions haven’t been flying in. I do believe they will make another eventually. At the bottom of the financial pdf, there is a line that reads ‘mission is to grow LJN into a 15,000 boepd producer within 3-5 years’ I for one don’t think we should be giving up on that, particularly now that it’s almost sustainable stand alone.
Is that we’ve been artificially ripped off with that RNS. Lots of mention of big numbers $64 million capex increase, $55 million price increase in 2023, $17 million to be repaid at year end. No mention of net to LJN or Longboat.
No mention that the 2023 capex budge was covered in the acquisition price which changed from $12M to $15M on handover day.
No mention that the net capex in 2024 is $3 million and $1.5 million net to LBE.
‘Poor performance’ of statjford wells makes it sound like the wells have underdelivered despite original forecast predicting 600 boepd and that increasing by 66% to 1000 boepd once the remaining. Two wells are online.
Complaining about Kveikja being slow, well let’s be honest. Developments are slow unless there is maximum of two partners and they own the infrastructure.
Never seen an RNS like it with no tangible details. Honestly the poorest worded RNS I’ve seen, it feels like it was designed to crash the share price
Again, $9.1 million at year end 2023. $17 million from the acquistion facility. $26 million cash at hand in total
Paid $15 million for the asset. So $11 million cash at hand.
Operating income of $13 million. $24 million cash at hand year end.
Capex costs of $3.2 million. 21 million cash at hand year end.
Repay $17 million. $4 million cash at hand year end.
Capex costs paid back anyway.
Obviously there will be other costs throughout the year. But struggling to see a signifinant black hole.
What are the classifying as significant here ffs. Because significant for JAPEX would be 100’s of millions. Significant for us is what? £100,000? £1 million? What?
Agreed and therein lies the problem.
The company has been so ambiguous with details that speculation and D-day predictions are rampant.
Standing back though and reviewing the cash at hand, income and JV finance, IMO it can’t be more than a couple of million and actually given we’ll be producing 1000 boepd from the JV… a couple of months worth of revenue.
If the company walks away from Norway then I can only put it down to an engineered failure because it makes no sense IMO… again based on the finances available.
Zengas agreed (again) good analysis.
I was also intrigued with Geraldine’s background.
CPR report will be so they can flash it in the face of potential partners and say ‘this is what it’s worth and this is what we want’ - I’d expect news on that fairly soon afterwards.
Looking at the slides I’d suspect either shell or total as farm in partners. Given shell have the adjacent block I’m leaning towards them. Even if it’s to prevent total from muscling in on a prospect that straddles the border of the two blocks
This is the statement from longboat
In the event Longboat cannot meet its share of additional working capital shortfalls at LJN in a timely fashion, the terms of the Shareholder Agreement and Acquisition Facility could result in Longboat forfeiting some-or-all of its shares in LJN.
There are no figures provided anywhere within this statement on what the working capital shortfall is. Speculation is rampant. How much is the shortfall is my point because it can’t be 17M
It’s clearly not the $17 million that’s been suggested multiple times across multiple boards given they had 9 million in cash to start with, they have operating cash flow of 13 million and the capex spend is paid back anyway.
Longboat has a shortfall clearly. But its crazy to suggest that they would exit a JV that
a) the original production prediction of 600 boepd increased by 66% to 1000 boepd
B) acquisition cost rose from 12.5M to 15M (20% increase in cost). Yes capex costs this year but again favourable terms on returning it back
C) would pay back in less than a year at full rates
D) would provide cash flow for 15 years
I just don’t buy that they would risk losing the value of Norway without exploring financing options on the asset. Helge mentioned that they had already been looking at RBLs and other financing which would extend the 100M debt facility to 200M.
LJN £8.1 million at 2023 YE
https://m.youtube.com/watch?v=GVElFW-2ipY&t=19s&pp=ygUPTG9uZ2JvYXQgZW5lcmd5
Agreed Zengas. WAAA absolute garbage.
I’d suspect that one of the wells is projected to be online at circa 750 bbls by mid July and second well taking this to 1000 bbls by September.
The assets produced $2.5-3 million at $45 per boe between jan and April.
A further $2.3 million may to July.
A further $2.3 million July to August
And finally $5.6 million to the end of the year.
So a total of $13 million for the year.
I believe they had $9 million cash at the end of 2023 in the JV (I’ll need to recheck the last update). Capex costs will be repaid by the Norge government at the end of 2024.
You really believe they will wash their hands of the JV? Which is generating $1.4 million a month in profit (assuming $45 per boe after all costs)
For once. I have to agree Ash. Had all the catalysts for major growth.
I’m not concerned though, the doom squad have arrived in force but for me this is a fairly simple short term issue.
Lbe projections still have Statfjord still reaching 900 - 1000 boepd in August based off the guidance. $1.4 million revenue per month at a modest $45 net profit.
RBL is a no brainer given they have reserves from the field that they can book it against.
Capex cost are paid back at year end by the Norwegian government so any spend this year is paid back at the start of next year.
A little good will from Japex.
Struggling to understand why they agreed a Jan 2025 anyway but there are some serious doomsayers on here at the minute.
‘Way oversold’
That doesn’t mean anything in the London market. This company should have been a minimum £20 million Mcap with production from Stafford, Kveikja (worth 15-20 million alone on a sale), other prospects in the ring vei vest area, and one of the largest instilled prospects in Malaysia.
Never mind a 60% drop on a minuscule market cap anyway. The London market really is dead. Run by funds that manipulate prices and traders that scalp a company into oblivion
Bad wording on behalf of the CEO referencing gross vs net capex. Much of the additional capex is payable by the Norwegian government at year end which will resolve the payable back to Japex piece.
Overall I’m not concerned here, just a crappy worded RNS by a team that should know better.
Also not happy with the drill date slipping from Q3 to Q4