Longboat Energy, an emerging full-cycle E&P (exploration and production) company, has announced that it has reached an agreement with Japan Petroleum Exploration Co. Ltd (JAPEX) to make a significant investment in its Norwegian subsidiary, Longboat Energy Norge AS, to form a joint venture.
The new company will be renamed Longboat JAPEX Norge AS and aims to build a leading Norwegian-focused independent.
The transaction will involve a cash investment of up to US$50 million for 49.9% of Longboat JAPEX. This will be comprised of a cash investment of US$16 million on completion, a contingent consideration of US$4 million payable on the successful completion of a production acquisition currently under review, and a further tranche of up to US$30 million payable on a sliding scale following a successful discovery on the Velocette exploration well due to spud in Q3 2023.
JAPEX will also provide the joint venture with a US$100 million Acquisition Financing Facility, a five-year facility to finance acquisitions and associated development costs in pursuit of the joint venture’s strategy, with an interest rate based on a sliding scale with an all-in cost over the term of less than 10%.
JAPEX, founded in 1955, is a public company listed on the Tokyo Stock Exchange, with proved reserves of 159 mmboe (million barrels of oil equivalent) and production of 58,500 boepd (barrels of oil equivalent per day) as of FY22. Its largest shareholder is the Japanese government (35%) via the Minister of Economy, Trade and Industry of Japan.
Longboat JAPEX will pursue a growth-led strategy to create value predominantly through the acquisition of development projects, growing 2P (proved and probable) reserves and reaching a significant production level within three to five years. The joint venture will continue to target the drilling of one to three exploration and appraisal wells per year.
Helge Hammer, Chief Executive of Longboat, said that the company is delighted to have found a strong and complementary strategic partner in JAPEX.
He added that the Longboat team has significant experience and expertise in the Norwegian E&P sector and has strong local industry relationships.
By joining forces, the two companies will have greater opportunities and strong financial backing to pursue them. He believes that this agreement has laid the foundations for exciting growth in the coming years.
Masahiro Fujita, President and CEO of JAPEX, commented that he is very pleased that JAPEX has formed a partnership with Longboat for a Norwegian E&P business.
He sees a very strong alignment in the business expansion strategy in Norway and believes that the combination of the Longboat team’s significant experience and expertise in Norway and JAPEX’s technical and financial competence will be very beneficial in pursuing such a strategy.
Longboat Energy is a UK-based company focused on the appraisal, development and production of hydrocarbon resources in the Norwegian Continental Shelf. The company has a portfolio of assets consisting of both operated and non-operated interests in licences in the Norwegian Sea and the Northern North Sea.
Longboat Energy was established in 2019 by a management team with a track record of building and managing successful upstream oil and gas companies. The company’s shares are listed on the London Stock Exchange.
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