RE: Admission Document10 Jun 2021 23:08
In addition to Blackrock buying another 7million shares, Fidelity, AXA & SVM also went in heavy as well as some large new investors (Smith & Williamson, Chelverton Asset Management & Janus Henderson).
There is a lot of information in there and it’s well worth a read but a few other interesting snippets in terms of ongoing strategy:
The Directors continue to believe that ongoing market dislocation in the oil and gas industry, and specifically in the North Sea, provides a significant number of opportunities for accretive and strategically beneficial transactions for Longboat Energy.
Many majors have continued to look to reduce investment in the North Sea and as a result of rapid acquisitions, and there are a number private equity backed vehicles holding assets that are non- core to their businesses. The Directors believe that many of these non-core assets can hold significant value for companies like Longboat Energy, which can focus on unlocking intrinsic and upside value, thereby benefitting both parties in a transaction.
The Board believes that a reduction in competition amongst smaller E&P companies, resulting from continuing North Sea consolidation, portfolio streamlining and ongoing exits from incumbent firms, should present a timely opportunity for Longboat Energy to identify and acquire attractive assets in Norway and the UK.
Given the time frame the Directors believe is required to fully maximise the value of an exploration project or early stage development asset, including the Target Assets, it is expected that such assets will generally be held for the medium to long term. If successful, further equity funding will be required to appraise and develop the Target Assets, or to acquire additional assets in the future. However, the Company will also pursue potential assets swaps and cash sales where it is beneficial to do so. Subsequent acquisitions of producing and near-producing assets are more likely to include an element of debt to equity gearing.
The Company’s core strategy remains unchanged and there are exciting opportunities ahead as the backlog of transactions begins to unwind. 2021 has so far seen oil prices stabilizing at a much higher level and, with COVID-19 vaccination programmes being rolled out, the transaction market is already looking more positive. Several processes have been launched recently and the Directors expect more assets to come to market as vendors seek to take advantage of the uptick in commodity prices.
Exploration drilling results in Norway have remained strong and, as demonstrated by the Farm-ins, the Company’s management team considers exploration assets to be an integral part of the Company’s investment strategy. Longboat Energy is well positioned to pursue expected future transaction opportunities, guided by a management team with a strong track record of delivering value through M&A.
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