The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
One way of looking at this is we expanded the operations to S.E Asia and a larger team to manage that and take on acquisitions as seen in the recent annual report but they talked of cost cutting and can't argue that they've been quick to make some savings where possible.
2 directors are standing down and won't be replaced in the immediate future.
Brent Cheshire £70k.
Jorunn Saetre £50k.
Nick Ingrassia was on 230k and moves up to CEO replacing Helge Hammer who was on £300k.
The current Chairman of LBE is on 95k.
Helge leaves to become chairman of LBE/Japex - will there be a pay cut to a more modest Chairman salary or still remain on £300k ?
Either way, Helges salary would now be 49% met by the Japex ownership portion of the JV so if he remains on £300k this would be a net saving to us of £147k.
Cost cutting of around £200k at least to perhaps £300k depending on what Helges salary at LBE/Japex is.
Also if Nicks salary is not as large in taking over as the previous CEO it might increase the savings.
RR
It's an interesting one at this moment in time. Maybe in anticipation of S.Sudan or a further acquisition but clearly for Oil & Gas.
It can't be related to the Sipec acquisition announced in March as that is being acquired by - Savannah Energy SC ltd.
" The SIPC SPA will see ****Savannah Energy SC Limited (a wholly owned subsidiary of Savannah)**** acquire a 75% equity interest in SIPEC for cash consideration of US$52 million, payable on completion and subject to customary adjustments for a transaction of this nature from 1 September 2023.. The Jagal SPA will see ****Savannah Energy SC Limited**** acquire a 25% equity interest in SIPEC."
Imo ideally you want a major farmout with a committment for 3-4 exploration wells.
At 4p it was a £50m m/cap with barely £3.4m of funds.
If UPL go it alone with the limited funds they have, it becomes a one shot wonder on the outcome of that one well and a long way to fall on a poor result if no back up funds, thus likely heavy future dilution.
A 3-4 well farmout deal would prevent that to some extent unless all wells were failures and investors sit each well out.
Need the CPR, the COS on the well and more meat on the bones re derisking but with the limited funds, a farmout is the only way to go.
On the 23rd March i posted about needing cash but was immediately tackled by Flip Flop saying 'oh here they come' and assured us in print that the board told him a placing was 'lies' and 'we'll silence them' - Strange his posts are all gone. I'd be wary of these telegarm groups trying to control info, re-spouting it here and just trying to remove any relevant questions just beccause it may be deemed negative to those that wont ask serious questions.
Other than the funds,
The same questions still stand in my 23rd March post more so as i see they haven't
"No funds that i can see for drilling so they'll need a farmout - they've since indicated in an RNS 22/1/24 which wasn't out there before officially that i could see. Is that happening conditionally ahead of the PSC award if won and on farmout how long before that partner is ready to go, requirements/stipulations re risk/seismic etc).'
Also will they shoot any 3D seismic - they have absolutely none. Will a farmout partner want this first or take a chance on the very limited 2D lines they have commiting drilling funds on limited seismic - thus pushing drilling activity back ?
Also the warrants/options in play have this potentially reaching 1.5 billion shares in issue and i don't think that's enough to run the company (3D/Drilling) without that farmout.
It's fine when the PSC is awarded but - then need an oil in place estimate when it comes and an independent CPR (not the company estimate) but a RECOVERABLE estimate is needed more so to go on and the biggest point of all is - how much left relative post farm out and then net to UPL considering the JV status.
On the project schedule there's nothing on actual drilling by the end of Q2/end June other than Partner & Strategic engagement on PSC til end Q2 - what's that actually mean ??? Acquire 3d next ? Drill without it ???
Maybe a clue that the seismic matter could hold this back as item 3 objectives is -
"Design new seismic acquisition plan and/or other feasible exploration tools for execution in future De-risking activities".
These are questions the board haven' t answered in any presentations and it could all dither on til Q3 Q4 or early 2025 before spud ?.
The monthly progress report presentation is poor on facts that actually matter. '
-----------------
As of today 30/4/24 now potentially 1.6 billion shares fully diluted. It will surely mean a further rise at some point as about $3.7m net from the raise will not cover all.
Latest presentation doesn't go beyond end June and no drill shedule - stuffed with photos but light on significant info that matters - therefore what slot or when will that rig be available for a designated slot. Is it cold or warm stacked ready to move ? Will it sit around earning no money until UPL/Govt decide to give the well go ahead ?
Just to add, it might be too much to expect all good fortune to line up, but with those 3 country assets performing at that indicated level, a positive meaningful compensation award in the next 12 months or so could potentially leave us net debt free.
No operational or financial update at the start of the year for 2024 so looking back to the half year end June 2023 we produced an average 138.5 mmcf/d
Total 6 month revenues were $138.7m invoiced including oil so pro-rata could be about $270-$275m although it was guided as being greater than $235m for all 2023. Also they said the 20/4/23 $44.9m from Cameroon for a 10% pipeline sale was received.
If there is another hit from the exch-rate, it should be tempered by the capex being reduced by $30m ($60m down to $30m).
Net debt at 30/6/23 was $443m (Where are we almost 12 months on?)
Since then - we're paying around $60m for SIPEC with $52m of that to be adjusted down to an effective date of 1/1/23.
8.7 mmbo 2P and 227 Bcf gas ( 46 mmboe total).
Sipec is producing 1400 bopd which at $80/b is about $41m year so we could have $15m knocked off our settlement price in 3 months time.
So perhaps net debt on this new acquisition = $45m by end of August.
If our existing oil/gas revenue is about $270m, this new acquisition at the current production level would take it to about $310m.
Within 12 months of deal completion the combined Stubb Creek oil output is due to rise by another 2,000 bopd which would give us an additional $60m/yr revenue at an $80/b oil price.
So without any additional gas sales revenue, we could be around $370m revenue from Nigeria alone with the additional oil sales and our access to dollars for a dividend.
I'd really be looking to that deal being approved asap which i think would help our overall refinancing of Accugas debt. If nothing else that new income stream would radically improve our net debt position and steer us to a future dividend with no other asset contribution.
Niger 33 mmbo 2C to 2P reserves on sanction.
Attaining 1,000 - 5,000 bopd has to add $29m - $146m revenue at $80/b
Above is a pathway to $500m revenue at little additional cost and reducing the net debt that we have.
-------------
South Sudan
After almost 1.5 years the purchase price has to be greatly reduced.
50,000 bopd at $70 -$75/b oil could be $1250m - $1360m revenue/yr.
If South Sudan debt is also ringfenced, i can definitely see without doubt why this is a major asset to go after regardless of the difficulties next door and the annoyance to some shareholders (i include my self but i see the prize as well despite lack of newsflow).
If it could get back to ramping up it's last few years of oil decline, it could mean 75-100,000 bopd net here.
----------
Overall we're not in a bad place imho. The Sipec deal is a very good revenue bolt on so they're not sitting still. It also gives us a lot more gas. They just need to get Niger into gear and if we really want reserves growth there we need to pay for exploration or else get a drilling partner in. It could really be unlocked if S.Sudan goes through so maybe why there is little newsflow on Niger.
In exactly 3 months (1/8/24) we will be entering our 11th year as a listed company.
It is pretty galling that after all this time ie 10 years, not a single barrel of oil has flowed in Niger whether for production or under test.
The entire PSC terms were used up and the only saving grace was that they were converted into one before they expired . But already 2 years is almost come and gone under those new terms.
"The Company anticipates that the R1234 PSC will become effective in Q1 2022 and will reset the Company's licence validity to up to 10 years for the exploration phase, comprising an initial term of four years, with the option to extend this term by two further terms of two years each. In addition, one of these three terms can be extended by the Company for a further two years. " (Since stated in the annual report as completed in H1 2022).
Quite simply if they don't get their act together, patience will grow thin not only by investors but the host country under different regime management.
There was countless $millions raised for Niger.
We were told 2.8 billion bls mid case recoverable with the sokor alternances being the low lying fruit as proven by our own 100% success rate and the Chinese at 75%+ creating over 1 billion bls reserves.
The export pipeline is operational.
Quite simply what the eff is the excuse come the results in June and agm July if they haven't got a plan in place to significantly drive this forward.
Either bring a partner in with deep pockets or just keep time wasting where we ultimately don't benefit at all by delays and tracts of the PSC are relinquished under the PSC terms ?.
Seriously, come results/agm there needs to be a credible plan of action. Six months of this year will be gone. We are not a charity no matter how much the company claims societal good. It's just no longer credible or acceptable to be doing nothing of meaningful size. To go back to my opening lines, 10 years is shameful and any further waffling about future intended plans will no longer wash. Management need a collective boot in the hole re this fiasco of a situation not to mention their divergence to wind and solar while the oil assets there go nowhere fast. I intend to voice this directly to them and i urge other shareholders to do the same that this situation in my view is no longer acceptable and can't be dodged come results/agm.
Absolutely agree.
200k bopd is within 2 years
Even 10% capacity via the pipeline is 20,000 bopd. CNPC will still earn a very decent transit fee.
From memory, it was the intention to be exporting 500,000 bopd before the end of the decade .
Great news and to see that the pipeline will in its next phase be doing 200,000 bopd by 2026.
If ever there was an incentive for a farm in with Save or to go it alone, then no excuse and something that they categorically need to clear up by the results date in June.
Although the SAVE website on major shareholders states it was last updated on 31/1/24,
'The following members own legal and beneficial interests representing three per cent. or more of the Company’s issued share capital:'
Lat time i looked there was 9 holders but there now includes one called Ruffer and the first time i've noticed them making it 10.
Ruffer doesn't hold over 3% - it holds 1.57% or 20,586,437 shares
This brings the 10 listed institutions to 61.14% + 4.79% for directors = 65.93%.
20/3/23 OKEA
The Statfjord Area comprises the Statfjord Unit, Statfjord Øst Unit, Statfjord Nord and Sygna Unit.
The Statfjord Unit development covers the Statfjord A, B and C concrete gravity-based platforms. The other fields are subsea developments tied back to the main field platforms.
Statfjord Area is one of the largest fields on the NCS in terms of initial oil in place which was in excess of 6 billion barrels. Statfjord A was put on production in 1979, followed by Statfjord B in 1982 and Statfjord C in 1985.
====================================================
*****
The field is operated by Equinor and the Field Life extension (FLX) unit was established in 2020 with an ambition to deliver 200% increase in remaining reserves, 25% cost reduction and 50% CO2 reduction in the Statfjord Area by 2030.
****
================================================================
https://www.okea.no/investor/investor-news/okea-acquires-28-working-interest-in-pl037-statfjord-area-from-equinor/
Longboat
Statfjord Øst is located seven kilometres to the northeast of the Statfjord field in a maximum water depth of 190 metres and produces oil and gas from two subsea production templates and one water injection template tied-back to the Statfjord C platform.
The Sygna field is located just northeast of the Statfjord Nord field in 300 metres water depth. Sygna produces oil and gas from good quality, Middle Jurassic sandstone in the Brent Group. Originally discovered in 1996, the field began production in 2000 from three production wells tied-back via a subsea template to the Statfjord C facility.
https://longboatenergy.com/operations-norway/
RR.
I posted this on the 8/3 - 2 weeks before the Sinopec deal with Save in Stubb Creek.
‘With Sinopec after 4 adjacent Agadem blocks, surely it could be an attractive deal to do something with us. Perhaps a swap on their 30+ million boe 2C gas at Stubb Creek and a bit more in exchange for onward 50% cost of drilling etc. Stubb Creek would convert to 2P once we had a sanctioned development plan as in Niger.’
Also since then, I posted that the Niger govt was taking the blocks that Sinopec were after in Agadem which were adjacent to our blocks.
My assumption was if they were seriously interested in Agadem with the government taking those blocks, then an obvious choice would be to do a deal with us given we were already partners on Stubb Creek. I was expecting this could come to the fore but as always a wait and see approach.
I don’t disagree Rocky especially as we are approaching the middle of the year already. I’d like to think that they’d bring in a partner maybe. One thing is for certain there also needs a comprehensive update on Niger given that the pipeline is operational and I’m sure now that CNPC will be planning the next phases for 2-300k bopd with pumping stations. They simply have to get moving with this asset asap which would be something on top of the decent uplift from Stubb Creek oil after the recent acquisition there.
Paul because you still can’t grasp what I’ve said and twisting it to suit the situation you find yourself in.
Anyway enough, I’ll leave you to look back while I and some of the others look forward to the future with the 1st production deal bagged, Japex funding deal, largest undrilled target off Sarawak consolidated all in the past 6-9 months with upcoming carried drilling Q3, wider Asian region team and deal sourcing in both jurisdictions.
Sorry Paul, contrary to what you try to put in peoples mouths, No.
You like to think you what you write is correct without checking facts and it's why i don't give you any credit in knowing what your talking about.
As someone who is 'new here and it shows' as you put it, let me remind you that without any fact checking on 1st Dec you stated our second biggest holder was out when in fact it was a transfer within the same group that i pointed out.
Well fyi Paul i've followed LBE since day 1 regardless of whatever being so called 'new here' to you somehow means. Maybe i just like the raft of new assets and Japex deal more so than you can see from your experience to date. An absolute shame that other investors such as myself come aboard and find this an attractive proposition which after all is needed given you're so far down from 100p to 16p.
Finally you now say 'you don't know the specifics of them' (deals to be done). Exactly you don't know other than your emotional reaction to try and explain it.
Well if you know how SVAL grew, you'd know it has no relevance to LBE in bringing it up as some sort of comparrison in the first place as it is a private equity created company by HiTech and should realise how the private equity influence on deal competition works and how others can be pushed down the food chain. Of course there are deals to be done but you'd have to bear in mind that for some sizeable deals you'd need to win through to preferred bidder status and why imo we've only had the small acquisition to date but hopefully 1,000 boepd to be achieved in the next 8 weeks.
It's why now they can say that the Japex $100m financing can give them the firepower they need along with potentially doubling that amount on RBL to get bigger and better deals - isn't that the point and why some were asking why were we bothering with small 300 boed deals (not so bad now as it approaches 1k boepd) but now also producer status.
If you still don't understand or seen the competition of PE re deals in Norway then there's a clue about S.E Asia where they say 'Private Equity largely absent' and 'Key competition from smaller and/or domestic entities'.