Monday 9 May 2022

Longboat Energy, the emerging full-cycle North Sea E&P company, is pleased to announce that it has farmed-in to two additional near-term, gas weighted exploration prospects on the Norwegian Continental Shelf (“NCS”) targeting combined gross unrisked mean resources of 2231 mmboe (451 mmboe net to Longboat) through an agreement with OMV (Norge) AS (“OMV”).

Summary

• Acquiring 20% working interests in Oswig (PL1100, PL1100B) and Velocette (PL1016);

• Oswig and Velocette are material, gas prospects close to infrastructure in Norway anticipated to drill in summer 2022 and Q2 2023 respectively;

• The transaction increases Longboat’s net unrisked mean resources by 68% to 110 mmboe with additional, on-block follow-on potential of 55 mmboe;

• Maintains the Company’s focus on material gas opportunities near to infrastructure in line with its ESG strategy; and

• Post-tax drilling costs net to Longboat of US$6 million (excluding carry).

Overview

Following recent bilateral discussions, Longboat has executed a two-well farm-in agreement with OMV to enter three licences on the NCS containing material, gas-weighted prospectivity near existing infrastructure in return for a partial cost carry, subject to certain cost caps.

The licences contain two firm wells on the Oswig and Velocette prospects anticipated to drill in the summer 2022 and Q2 2023 respectively. All the licences are operated by OMV which will retain a 40% working interest post-transaction. The licences have significant follow-on prospectivity which would be de-risked by any exploration success. The consideration for the acquisition of the interests comprises an aggregate pre-tax carry of approximately NOK109 million ($12.4 million), NOK 30.7million ($3.4 million) post-tax. The associated expenditure is anticipated to be met by a combination of Longboat’s existing cash resources and drawings on its NOK 600 million Exploration Finance Facility. The Company is fully funded for its current committed expenditure.

The transaction seeks to build on Longboat’s recent exploration success at Kveikje, Egyptian Vulture and Rødhette by adding two material wells, increasing its net un-risked mean resources by 45 mmboe to 110 mmboe across four firm exploration wells drilling in the next 12 months, including the currently drilling Cambozola well (Longboat, 25%). These wells fit with Longboat’s ESG strategy being large gas prospects, close to existing infrastructure and with plans for electrification from shore for one of the potential tie backs.