Longboat Energy, the full cycle emerging E&P business, announces its full-year results for the period ended 31 December 2022.

Operations Summary

Five wells drilled over the period with two significant discoveries: Kveikje and Oswig

Kveikje (Longboat 10%):

• Encountered hydrocarbons at all four targets levels.
• Discovered light oil in excellent quality injectitie reservoir in the main target reservoir.
• Estimate of recoverable resources between 35 and 60 mmboe gross 1).
• Operated by Equinor in prolific area to the north of the giant Troll field with significant infrastructure.
• Likely to form part of the Ringvei Vest multi-hundred million barrel cluster development.

Oswig (Longboat 20%):

• Gas-condensate discovery in large fault block with Jurassic Tarbert formation reservoir.
• Preliminary estimate of recoverable resources between 10 and 42 mmboe gross 2) based on in-place volumes of 100 to 215 mmboe and condensate/gas ratio of 110-130 bbl/mmscf.
• High pressure, high temperature find next to Equinor operated producing Tune and giant Oseberg fields with oil and gas export facilities.
• Drill stem test in sidetrack well flowed approximately 2.1 mmscfd of gas and 280 bpd of condensate (approximately 650 boepd in aggregate) through a 10/64-inch choke.
• Focus on identifying optimal well design for delivering economic flow rates, most likely by fracturing the well, to unlock the discovery.

Awarded three new licences in the 2022 Norwegian Award in Predefined Areas ('APA') Licensing Round:

• Lotus (Longboat 30%) is located next to Kveikje and contains an analogous injectite low risk prospect, which has the potential to add significant value. The firm well is planned for 2024.
• The Kveikje extension license (Longboat 10%) covers possible extensions of the Kveikje discovery to the west and east. 
• Oswig South licence (Longboat 20%) contains the potential southerly extension of Oswig. The prospect has already been significantly de-risked by the Oswig discovery and has the potential to double the size of the existing discovery.

Entered Malaysia by successfully winning operatorship of a Production Sharing Agreement for Block 2A (Longboat 36.75%) in the Malaysian Bid Round 2022:

• Exploration block offshore Sarawak in deep water covering an area of more than 12,000 km2 with material exploration opportunities.
• Low initial cost obligation and with three years until a drill decision.
• Malaysia entry significantly expands Longboat's opportunity set. 

Financial Summary

• Cash reserves of £12.1 million as at 31 December 2022 (31 December 2021: £26.3 milion) with borrowings under the EFF of £36.8 million (31 Dec 2021: £nil) and a tax rebate receivable of £40.8 million (31 December 2021: £8.1 million) due in November 2023. 
• Exploration Finance Facility increased to NOK800m (approximately £67.5 million) available for 2023 and 2024.
• Loss after taxation of £(15.5) million (31 December 2021: £(4.7) million) which includes write down of four wells.

Outlook

• Currently focused on monetisation and conversion of the value created by the exploration success into reserves, production and cash.
• Velocette exploration well (Longboat 20%) expected to spud in Q3 targeting a large fault block with expected Cretaceous gas filled reservoir indicated by seismic amplitudes confined to structure.
• Acquisition and growth in 2P reserves and production remains a key objective.
• The strategy remains unchanged to build Longboat into a full-cycle E&P company with Norway remaining the core area.

Helge Hammer, Chief Executive Officer of Longboat Energy, commented:
"In 2022, Longboat was one of the most active independent exploration companies in Norway where we drilled five wells and made two significant discoveries. Kveikje and Oswig are among the largest discoveries made in Norway in 2022 and, going forward, we are focussing on maturing the assets technically, unlocking the commercial value of our discoveries, and growing reserves and production.

"While Norway remains of prime importance, we are delighted to have established a presence in Malaysia and in the coming year we will seek to build cashflow generating E&P portfolios in both Norway and Malaysia."

1) The range represents 2C to 3C resource estimate range from ERCE Competent Persons Report September 2022 
2) Operator's estimate of the size of the discovery