Longboat Energy, an E&P company established by the former management team of Faroe Petroleum, has ended its oil and gas story in Norway by wrapping up the divestment of its assets. As a result, the firm will now focus its efforts on building a full-cycle E&P business in Southeast Asia.
In the wake of the recent structural changes to the Norwegian upstream industry, which are perceived to favor an increasingly small group of large companies with long-term investment horizons and access to the low cost of capital, Longboat decided to exit Norway and concentrate on its E&P business in Southeast Asia, where it saw significantly more potential for a small company.
In line with this, arrangements were made by the firm to sell its 50.1% interest in Longboat JAPEX Norge (LJN), its Norwegian joint venture (JV) with Japan Petroleum Exploration (JAPEX) , to its JV partner for $2.5 million in cash. This sale has now been completed and Longboat has received the full cash consideration, enabling JAPEX to assume all future financial obligations associated with LJN, including existing debt.
James Menzies, Executive Chairman of Longboat, commented: “I would like to thank both our staff and partner, JAPEX, for their tremendous efforts in managing to complete the process of withdrawing from Norway in just under a month from announcement.
“Following completion of our transaction with JAPEX, Longboat’s streamlined board and management team will now direct its full focus on building a business in Southeast Asia. We will take advantage of the exciting opportunity in front of us to grow shareholder value.”
According to the company, the proceeds from the divestment, existing cash resources, and savings from continued cost reduction measures are forecast to provide sufficient capital through the end of Q1 2025. The firm’s near-term focus remains on its Malaysian activities.
Therefore, Longboat is pursuing the farm-out of Block 2A, which contains the Kertang prospect, and finalizing negotiations with Petronas on a production sharing contract (PSC) for several assets described as material and undeveloped gas fields capable of near-term development.
In addition, the firm plans to rename and rebrand itself in the coming months as the final step in repositioning its business for success in Southeast Asia.