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> When the IPO was £1 it’s a disgrace to be honest.
Generally I tend to agree... These options simply replace previous incentive schemes which were previously at much higher price (£1.5-2). However : the most important thing is that management interest remains aligned with that of share holders.
Unfortunately we are where we are - lack of funding meant that LBE had something of a false start to life.
Helge will also have lost out as an initial investor at £1. Its not ideal - but if they can build on the impressive JAPEX deal then I don't grudge them future success as part of that ride. Closed period will have prevented the management from loading up at recent low prices.
The UK government has destroyed the north sea industry with 75% tax on oil companies.
The real scandal is that
- oil prices returned to pre Ukraine war levels
- the energy bill support scheme ended
- the tax not been invested into renewables.
Contrast with Norway. The taxes are still high but the rebates set upto support exploration. LBE have spotted this : we are now very well placed to take advantage....
Thanks for interview link. Fascinating insight to a remarkable character
Good news this morning. For sure : it's a very small production deal (just 300 bopd) : but it ends the cash burn and can be offset against existing tax losses. Turns LBE into cash generative company and justifies the wages which is important.
Basically means LBE are fully funded to go exploring and hit a jackpot in future.... Norwegian tax breaks on exploration make this relatively low risk (no tax on dry holes). Smart strategy.
A small deal that generates revenue and justifies the wages being paid each month. Plus it can be offset against existing exploration tax loses. Smart move that ends the cash burn.
I notice Graham Stewart has a new venture (Curium Resources) focussing on southern North Sea gas. He is still on the board at LBE - though never been active in presentations. Obviously saw some opportunities that didn't fit with Longboats norwegian focus.
https://www.energyvoice.com/oilandgas/north-sea/exploration-production/515848/curium-resources-north-sea/
https://curiumresources.com/
Great presentation. Lots now to be positive about ...
In retrospect the slow start to Longboats journey was down to lack of financial firepower rather than geological competence. With JAPEX backing those concerns now gone. At these low prices the potential for success on Velocette is clearly not priced in. In many ways that has become a free hit. Though LBE is no longer a 1 trick pony. Reading between the lines I expect a small production deal to be announced shortly...
Rns in the morning? I think so...
£1 easily achievable as described above.
Getting there quickly depends on Vellocete drill success.
However with JAPEX backing this is no longer a risky one trick pony.
Senseman. As fellow ex-shareholder can I thank you for all the hardwork over the years. Sadly the bad guys won here.
I am surprised at todays drop : results looked financially very good to me... Ultimately this has been crippled by windfall taxes. Though concerns about production also lingering.
Thoughts? At these prices I am thinking about dipping a toe back in.
Clearly the company sees more value in drilling adjacent Lotus than selling Kveikje alone. JAPEX deal has put them in position of power to make such strategic decisions. Today's RNS a simple reminder than LBE is not a one trick pony.
This is not a get rich quick traders share - however those with modicum of patience will be rewarded
Clearly the company sees more value in drilling adjacent Oswig than selling Kveikje alone. JAPEX deal has put them in position of power to make such strategic decisions. Today's RNS a simple reminder than LBE is not a one trick pony.
This is not a get rich quick traders share - however those with modicum of patience will be rewarded
£1 definitely achievable in short term *if* Vellocete drill delivers. The £30 million potential Japex bonus is 3x today's market cap alone.
However the real reason to invest is the £100 million finance facility. That is plenty fire power to deliver significant production deal that would blow current share price out the water
Current price is crazy... LBE is valued at less of a premium, vs cash in bank, that it was before the JAPEX deal was announced! Certainly much is still riding on Velocette. However with JAPEX backing that is no longer a binary drill. Arguably none of the future potential upside yet to be priced into share price. The biggest risk isn't this dropping to 15p but missing the significant re-rate that should, hopefully, come over next 6-12 months with moderate success.
Kistos have done very well but been crucified by windfall tax in UK and Netherlands. The fact they have moved for a deal in Norway shows the LBE are well placed. Over next 3 years I suspect that LBE might do very well (not that it is a competition, Andrew Austin is top drawer). Norway is a great sector to be invested given geopolitical and uncertainty and exploration tax breaks.
^ Correct, tax on Norwegian oil & gas is high.
Though with windfall taxes the equivalent rate in UK and NL is now also 80%.
The difference with those sectors is
1) Stable tax regime in Norway.
2) Very generous breaks on exploration.
LBE is a unique position to exploit all of this....
It is not easy to become an oil & gas explorer in Norway.
Plus Norwegian oil & gas is now very important to rest of the Europe over next 3-5 years.
Hence the reason Japex have bought in.
At 20p/share the market cap is currently less than £11 million.
Undeniably cheap given:
- Cash in bank is £12 million
- Existing discovery Kveijke (4 million barrel net to LBE) surely worth ~£16 million ?
- JAPEX to put £16 million in when deal concludes
- JAPEX to put further £4 million on conclusion of production deal (that we know is under negotiation)
- JAPEX deal brings $100 million finance facility for future production deals
- Velocette well (Q3) could bring 26MMBOE to LBE (20% stake). Eye watering value if successful ($4 per barrel?)
- Velocette well could also bring additional $30 million from JAPEX
This is seriously cheap.
Anyone talking about lower entry point is not seeing the big picture and risks missing the boat....
There are a whole number of triggers which should boost share price in coming months.
The cash burn is not unreasonable (£100K/month) assuming the management can deliver on promises.
My only concern is that a lot is riding on Velocette. Though at these prices I would argue anticipation of success not yet priced in? So arguably at 20p the Velocette well remains something of a free hit (if it delivers then I dare not imagine where the share price might go).
One thing not mentioned. Given current geopolitical situation then Norwegian oil & gas is a great sector to be invested. Norway is the biggest provider of oil & gas for Europe and politically stable. On top of that the tax breaks for exploration are generous, plus unlike UK and NL there are no issues with windfall taxes.
JAPEX have obviously done their homework and see value in the management team and work to date (it is not easy to set up an exploration company in Norway - hence the reason JAPEX bought in). Good luck all.
@GeordieShores,
Exploration takes time and is risky but offer potential for good returns.
Current geopolitical trends make Norwegian oil an attractive sector to be invested.
This is now a fully funded company with longer term potential to offer significant returns.
However : you would you would want to remain invested for 3-5 years rater than just the next drill.
> size & scale of the partner
Indeed.. Simply adding JAPEX to the company name surely add significant market credibility.
They now have a vested interest to make sure this flys (which it surely will now).