The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
Lol Ash. I think the difference is now, that Longboat finally have someone (JAPEX) behind them. Let's see what they come up with.
In the meantime, I noted Malcy has been scracthing his head about the recent management changes:
"As I write I am waiting to talk to Longboat management about a series of management changes which leave me somewhat unconvinced. The company has a large number of excellent directors but are they all in the right place? As a former Faroe fan I cannot understand why Helge has left the management team, I am known to be a huge fan of James Menzies so that area is in excellent hands but I guess better folk than me will tell me one day… I must be missing something, it wouldn’t be the first time."
Who else is wondering whether HH has been pressured to move aside by some large shareholders. Due to shareholder value destruction / lack of progress.
Or is it just that he has reached retirement age.
I noted our new CEO shelled out about 170k for shares at 75p a share, back when they raised 35m for the Norway drilling deals.
Did you sell out Paul? I remember you saying a couple of years ago that you held quite a chunk? As did mozzabezza, not heard from him for a while either..
I'm still here, in from 70p in 2020, have averaged down quite a bit since then.
I'm comfortable waiting, believing they've finally got themselves in the position to do well from here.
Share price performance has been disappointing for sure, but I don't put all the blame on the company. I believe the pandemic changed the market completely. Pretty much all deals where shelved initially, there was hardly anyone wanting to sell when the oil price was so low/unstable, not in Norway anyway. Then PE leveraged cheap money massively, which skewed the market dynamics as the market for M&A began to come back. The share price has not recovered from the II sell down, I guess it's whether one sees that as a buying opportunity. But if you don't believe in the management, as you clearly don't, then I guess you see no upside from here.
The favourable environment for O&G activity in Norway looks set to continue for a long time, with the Norwegian Offshore Directorate even stating “would like to see companies exploring actively in more frontier areas.”
Bit of a contrast with the UK's stance!
https://oilprice.com/Latest-Energy-News/World-News/Norways-Natural-Gas-Production-Hits-Record-High.html
Deeko - yep!
Crucially, Longboat now have the financial backing with JAPEX. And JAPEX have made their intentions clear.
Longboat's original "blue chip" investors turned out to be a disaster, very damaging, destroying the share price when they bailed. Who is to blame for that though? Longboat not bringing them the right deals, or the fickleness of the likes of Blackrock?
It seems Longboat learned from that debacle though, and we all expect much better outcomes with JAPEX.
Is SVAL Energi too big a mouthful for JAPEX, or might they see that as an easy way to quickly reach their targets?
Worth noting that Sval Energi was formed in 2019, the same year as Longboat.
Interesting to compare the progress and achievements of the two companies during that time!
Come on boys, surely just the chunky opportunity you've been looking for, especially now you've got the Japanese Govt. behind you.
Sval producing 70k barrels..
https://www.reuters.com/markets/commodities/private-equity-backed-norwegian-oil-producer-sval-energi-up-sale-source-2024-01-19/
Yes disappointing not to hit the jackpot with Velocette, and the Egyptian vulture writedown, however Carmen extending into the licence area looks like a significant unforseen bonus, and of course Kertang off Sarawak has billion barrel potential.
So with JAPEX's funding for Norwegian development/production acquisitions, as well as the stated intention of production acquisitions in Malaysia, there should be plenty of positive news to look forward to in the months ahead. Note that current Mcap is same as at ipo, when they were just a name and 9 million in the bank.
Deal is to be back-dated to 01.01.2023 so LBE will be earning from the barrels that are now being produced at these fields again.
Good to hear Helge state that they are currently "very busy in the M&A market", and not waiting to first find out the result of the Velocette well.
Hoping to hear news of a sizable production or development deal in the coming weeks.
We could do with an activist investor like Tom Winnifrith here. Anyone remember his recent attack on "Andrew 'Piggy' Austin" after a similar (alleged) act of swine-like self-enrichment?
The game is rigged.
Yet more wholly undeserving snouts in the trough...
Yep - The two OMV-operated wells (Oswig and Velocette) were tagged onto the original six well programme which they raised £35m for at 75p a couple of years ago. It was explained at the time that because the original six well programme came in cheaper than anticipated, they were able to add these two wells on from existing funds.
So this well is not contingent on the JAPEX agreement, it was happening anyway, hence why they made a special agreement for an extra payment from JAPEX if this potentially huge find comes good.
Great to see things finally happening here! So pleased for those who kept the faith when II selling began pummelling us down from the 70 / 80p+ right down here. The tide has finally turned, all the financial uncertainty has been removed, and at last the positive news flow is coming. Japex have puffed the wind into Longboat's sails, they have finally unfurled and we are belatedly gathering some speed.
The recent production acquisition's price demonstrates to me that Longboat's main focus on exploration and development projects for Norway makes sense. It seems likely that acquiring interests in a development project might give best value for money over straight large production acqusitions, given the Norwegian tax system. And with so many development projects recently approved, there should be plenty for Longboat to choose from. And with exploration success they will get very valuable reserves - even those they have made so far at kveikje and oswig should be worth more than current market cap of company.
The possibility of acquiring producing assets in Malaysia for cheaper than can be had in Norway seems like the reason why they have got involved over there. So expl/development acquisitions in Norway, production acquisitions in Malaysia (when funds allow) would seem like the most economical way to create value.
Also worth noting that HH stated recently that the main value driver going forward will be exploration success. That kind of contradicts the general investor sentiment on here who hated the idea of the previous exploration deals and considered that acquiring production would be the easy way to share price increase. That's still debatable, but was a handy stick to beat the BoD with as the share price fell, mainly from II and sneller selling (don't you just hate Blackrock).
We should be a very valuable company in 3 - 4 years time, which is when I could imagine that Helge and the other Faroe founders will be aiming to sell up and sail off into retirement after building up the company.
Yes Helge said they would love to buy shares at these depressed prices, but that they had been (and obviously continue to be) in a closed period for a long time.
That was good to hear, but hardly surprising.
Hard to believe he's being allowed to hoover up so many shares down here, especially with at least one other large holder accumulating, and now we also know that the BoD are itching to average down in size.
Nevertheless, it bodes well for further sp recovery.
There is a new presentation on the Longboat Energy website.
Also, good to see the twitter hype has died down a bit, and some serious, presumably longer terms investors coming on board. Can only assume that the shares they are acquiring and coming from those who either don't have the patience, or the means, to hold for what is now surely a screaming 'buy and hold', for numerous positive reasons.
The Board need the share price to hit two pounds in order to achieve their bonuses and options, as per the Long Term Incentive Plan Award
Biggest risk to this BB was always going to be that good news would attract the trolls...
Finally some genuinely positive news this week. Well done to all the long suffering, longer term shareholders for keeping the faith, we might yet see some decent return on our investments yet!
The news seems really big for Longboat, I'm still trying to digest the implications. To have the backing and financial firepower of the Japanese government behind them is not something we had anticipated, it's such a great vote of confidence and puts Longboat in a strong position. Now they can finally start looking to seal those larger development and production deals that they had originally anticipated when they launched the company.
Norway proving that stable government with stable and realistic oil and gas policies will attract investment (why will nobody from the UK government stand up and make the obvious and compelling argument for such policies in the UK?). It also seems like the Barents Sea is back in play, Norway is really the place to be in Europe for an oil and gas company isn't it.
Lots to look forward to and hope to seeing the share price move back towards more realistic levels in the coming weeks.