Member Info for MozzaBezza

To be fair to you all, my opinion has changed a bit now I see its not just a reservoir engineer they're looking for.

I think it probably is a bit more indicative that there's positive movement. I was a bit concerned when it looked like only one role, but now I'm less concerned as its more of a package that wouldn't be so required in just the due diligence phase on full time contracts.

I suspect we're just going to have to agree to disagree on this point, Whirlaw.

Nevertheless, as long as they do eventually sort out a deal of reasonable quality I'll be happy.

That's a very good summary of the situation, Paul - I think I'll subscribe to that view point.

Regardless, fingers crossed we can get a deal soon, as afterall, that is the key here for unlocking value for us all.

Happy Easter!

Well, I've been in here over a year now, which I think illustrates I'm committed and you can check twitter out to confirm that (in so far that one can confirm anything from these posts, tweets, etc). Equally, I have posted a good amount of positive commentary on here from my own research and generally (I think at least) am reasonably balanced. Thus, I don't think it's out of character for me to suggest that maybe something isn't as positive as others might suggest.

The fact is, yes this could be a positive indicator, because it shows that the firm is thoroughly researching assets, but it could also be a negative one from what the current narrative is post update. If you had an RTO right around the corner you wouldn't need an imminent reservoir engineer/would be taking them on as part of any RTO, because you would have already done that part of the due diligence.

For me it basically says that they are at the very least six weeks away from an RTO post the appointment of that reservoir engineer, because that's about the shortest time you seem to be able to do these deals.

It's not 100% bad news. It's not 100% good news.

But right know the chatter is all "a deal in a few weeks max" and this would suggest otherwise.

Either way, I'm happy to hold as LBE is ultimately about RTOs so as long as they do one, I'm happy.

I will, however, say it as I see it, regardless of what everyone else feels (nothing personal in that).

Maybe I'm missing something, but I think on balance I wouldn't view that as good news that they are recruiting.

They've had a reservoir engineer before and he stayed for a while (four months) , yet we had no deal. He was a chap called Arne. https://www.linkedin.com/mwlite/in/arne-kristian-schille-6357051

He seemingly was replaced with a lady called Synnøve, albeit she is a drilling and well advisor: https://www.linkedin.com/mwlite/in/synnoeve-roeysland-14406311

Now it might be this is a positive step forwards, but actually it probably suggests that they haven't been in longer term consultation about assets or else they would have already had a reservoir be looking at these data rooms, etc.

The last one described his job as: "Main task was presenting asset overviews and corresponding risked production profiles based on data rooms and open source information."

So for me, the drilling and we'll advisor made sense as the next logical step and part of me just wonders if this might be a step backwards rather than forwards.

I'm still a committed shareholder, but I think there's a danger that we read too much into this.

TBH, I think there are probably one or two investors and the rest will just be hot money traders.

I'm pleased with this rise, but I just don't wnat to get my hopes up, particularly because the last time we tagged these levels Blackrock sold some down, so I think it makes sense to be cautious, albeit in an optimistic way.

I'm just being careful not to get too excited. We've been here so many times before with these volume spikes that I want to just be a bit cautious.

TBH, I'd still be surprised if we saw news within a fortnight.

I've got quite excited on higher volume days before and TBH, everyone previously has been just that - a high volume day.

No doubt that there are buyers out there today, which is nice to see, but certainly we've see a lot of volume come in before and no deal has landed, so I working on the basis of 'I'll believe it when I see it'!

Nevertheless, fingers crossed!

Yeah, that is a lot nominally, but it's for a good few reasons:

1. Gas is being viewed as the transition fuel and so there's a lot of competition for it vs oil at the moment in sensible jurisdictions.

2. Over and above the 33k boepd, they're getting 22 offshore licences and an eight percent stake in the Nyhamna gas terminal, which undoubtedly will be worth a good chunk.

Also, TBH, compared with other deals I don't actually think it's that far out of line. Enquest's Golden Eagle Area deal added c.10 kboepd, c.18 MMbbls to net 2P reserves and c.5MMbbls to net 2C resources, and that was for an initial $325m, but could go upto $400m, depending on the oil price moves.

So that's, initially $32,500/boe for Enquest (not sure what the oil/gas split is) or more, whereas this one is $18,636/boe production of gas plus all the extras.

I think they could do so quite easily, because let's assume they get the Suncor assets and ~6.6k bopd of production.

Well, they could forward sell one year of only 4k bopd at 55USD/bbl and get $80.3m.

Bloomberg said people were expecting Suncor assets to sell for ~$100m, so if that number stays about the same or even gets a bit higher they could probably get a bridging loan to fund it while they forward sell production.

Now, I still think there would be a mix of debt and equity, because that's what they've always said, but they probably could sort a debt only deal if they are savvy.

And crucially (this is why I think they must be looking at these):

1. Faroe owned stakes in these assets (so they actually would have unique knowledge).
2. It meets the criteria of having production with bolt on exploration.
3. It's all a long way from decommissioning (another point they made in the presentation).
4. It gets you in roughly the target BOPD range they said initially.
5. Suncor aren't popular with Norway who have blacklisted them for environmental reasons (oil sands in Canada).
6. Suncor are looking to sell Norwegian fields (estimated sale value of $100m - again meets the criteria): https://www.bloomberg.com/news/articles/2020-10-21/suncor-is-said-to-study-sale-of-north-sea-oil-and-gas-fields
7. Those are all close to major O+G hubs and the fields in question run more oil than gas (HH said they were looking more at oil than gas generally in one of the interviews).

I'd be really surprised if they aren't in discussions about buying them - it's just a perfect match really when you pull the strings all together.

I would rather see a deal for ~5kbopd than 10 with us having to wait for another six months.

That's just me, but I think from reading the presentation they make it pretty clear that they're looking to complete a few deals centred in pretty much one area probably.

Let's see, just a waiting game now, but it was nice to see some liquidity yesterday again!

I think they're probably looking for both at once. The core strategy has always been to start with production and the bolt on exploration.

I reckon they'll end up buying both at once by buying someone like Suncor's Norway fields, which for something like Oda that they had with Faroe would get them 6.6k bopd and exploration upside near the same hubs.

I completely agree with that. Makes total sense.

Pleasure.

I really think there's something going on here now. Whereas perhaps beforehand they were treading water a bit.

We'll see. Fingers crossed.

Thanks very much!

In addition, they even said they had a target list of assets back in the first interview (time stamped clip below), so I think that there's a good chance that what's happened is that covid meant that the sellers stepped back (because they either felt the valuations at that price of oil were too low, or because they needed to retain the incoming cash flow from production assets, etc) and so LBE likely just had to wait for the appetite to increase again:

https://youtu.be/67kAybETQQw?t=600

I do think that hidden within that RNS today, we got a few pointers that help to either corroborate what we thought previously or help us with new avenues of thought moving forwards.

Summarised here:

https://twitter.com/ProAIMTrader/status/1374324206440218625

I think it's fine really. Nothing we couldn't have guessed, but this part is key:

"Longboat is currently participating in a number of potential acquisition processes where we have unique knowledge and can take advantage of the continuing market dislocation."

It will be interesting to see what we get tomorrow.

I don't think we'll see a deal, but the key will be seeing what they do say in their 'outlook' section. Now, they could say: 'we're in X number of data rooms, have narrowed down to 3 major deals, looking at X bopd, estimated cost of X, indicated X level of debt'.

I think there's a lot they could say, but I'm not holding out a lot of hope personally.

TBH, I wouldn't be surprised if he did know of a book build.

Now, I wouldn't trade off of anything put on these boards, but most people probably know a thousand people, which would put one person two people away from knowing a million people.

The idea he might have heard of a book build wouldn't necessarily be farfetched.

Regardless, hopefully we'll hear something positive in the results on Tuesday.