Longboat JAPEX offloads partial stakes in two North Sea exploration licenses

Longboat JAPEX Norge, a Norwegian joint venture between Longboat Energy and Japan Petroleum Exploration Co., Ltd (JAPEX), has sold partial interests in a pair of exploration licenses on the Norwegian Continental Shelf (NCS) to Norway’s Concedo.

Thanks to its agreement with Concedo, Longboat JAPEX Norge divested a partial stake in production license 1182S from 30% to 15% in return for a full carry of the Lotus exploration well, up to an agreed cap above the dry well budget, which is expected to be drilled in 3Q 2024. The company also sold a stake in production license 1049, lowering its interest from 40% to 25% in return for Concedo carrying 15% of the firm’s 2024 exploration expenditure. This license contains the Jasmine and Sjøkreps prospects.

Helge Hammer, Chief Executive of Longboat, commented: “We are pleased to announce the successful farm down of the two Norwegian exploration licenses and the full carry of the Lotus exploration well cost, which is in line with our strategy to retain exposure to high-quality exploration wells but at minimum use of the company’s equity capital, and we remain fully focused on delivering on our plans to grow production and reserves in high-quality assets in Norway and in SE Asia.”

The license 1182S lies in the prolific Northern North Sea, 4 km southeast of the recent Kveikje discovery where Longboat JAPEX is a 10% equity partner. The Lotus prospect – also known as the Kjøttkake prospect – is comprised of Palaeocene injectite sandstones, characterized by excellent reservoir properties, and supported by seismic amplitudes.

Longboat JAPEX explains that it exploited its significant knowledge of injectite reservoirs, which are also the main reservoir in the Kveikje discovery, to secure the Lotus prospect in last year’s APA 2022 licensing round. Based on the internal estimates, Lotus contains gross mean prospective resources of 27 mmboe with further potential upside estimated at 44 mmboe. The chance of success is 54% with the key risk being hydrocarbon retention.

If successful, Longboat JAPEX underscores that Lotus/Kjøttkake is likely to form part of an area cluster development together with Kveikje and several other recent discoveries in the area, through infrastructure associated with the nearby giant Troll field. The Lotus prospect will be drilled using the Odfjell Drilling-managed Deepsea Yantai semi-submersible rig. Aside from the company, the license partnership includes DNO Norge (40%, operator) and Aker BP (30%).

Furthermore, Longboat Energy Norge initially held 25% in license 1049 in the North Sea where the deep Cambozola prospect was drilled in 2022. The shallower levels are the target for further exploration in the license, which has been stratigraphically split. Two prospects have been mapped, Sjøkreps and Jasmine, both targeting Tertiary plays and covered with new high-quality seismic data combined with new processing techniques to de-risk the exploration prospects.

The Norwegian player elaborates that Sjøkreps is a fault-bounded three-way dip closure at the Palaeocene level, with preliminary estimated recoverable volumes ranging between 20 to 300 mmboe (P90-P10). On the other hand, the Jasmine prospect is an injectite target at the Eocene level, which is analogous to the Kveikje discovery, with a recoverable volume range preliminarily estimated between 10 to 30 mmboe (P90-P10).

Moreover, the work program consists of seismic studies, potential seismic reprocessing and integration of results from ongoing and near-term wells targeting the same interval in the area, which combined have the potential to significantly improve the chances of success ahead of making a drill decision. The potential drilling decision has to be made by February 2025. Longboat JAPEX’s license partners are DNO Norge (40%, operator) and Petoro (20%).