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September 15, 2021

Longboat Energy spuds for first ever exploration well

Vår Energi has started to drill on its first ever exploration well in the Barents Sea, off Norway.

By Sam Tabahriti

Longboat Energy has announced the spudding of the Rødhette exploration well in the Barents Sea, which it owns 20% of.  The business was established in 2019 with the aim of building a significant North Sea-focused exploration and production business.

The firm was founded by the ex-management team of Faroe Petroleum, with the aim to replicate Faroe’s operational track record.

The Rødhette operation, which is expected to take up to six weeks, is led by operator Vår Energi using the Scarabeo 8 semi-submersible rig. The pre-carry net cost to Longboat is estimated of  $7m ($1.5m post-tax).

Along the drilling of the Rødhette well, three additional near-term wells are scheduled for drilling in 2021, with two of them expected to commence by the end of September.

Helge Hammer, chief executive of Longboat, commented: “Following the successful completion of our first transactions at the end of last month, I am pleased that we are already under way with exploration drilling.

“Rødhette is the first of three wells, which we expect will begin drilling over the next few weeks in an extremely busy and exciting time for the company. The wells have the potential to create significant shareholder value”.

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The Rødhette prospect is estimated to contain gross mean prospective resources of 41 million barrels of oil equivalent (mmboe), with further potential upside to bring the total to 81mmboe . According to Longboat, the chance of success associated with this prospect is 41%, with the key risk being related to fault seal and oil column thickness.

Three additional wells are scheduled for drilling later this year.

Among them, the Egyptian Vulture, which is expected to commence towards the end of September using the West Hercules semi-submersible drilling rig, is on a long-term contract with the operator, Equinor. The well is targeting gross mean prospective resources of 103mmboe, with further potential upside to bring the total to 208mmboe on a gross basis. The chance of success is 25%, with the key risk related to reservoir quality and thickness.

The Mugnetind prospect will also commence around the end of September using the Maersk Integrator jack-up drilling rig. However, this prospect is operated by Aker BP and is estimated to contain gross mean prospective resources of 24mmboe, with further potential upside estimated at 47mmboe on a gross basis. The chance of success is 51% but the key risks are the reservoir’s quality and presence.

Lastly, the dual-target Ginny and Hermine prospect is scheduled for December 2021, using the West Hercules semi-submersible drilling rig operated by Equinor. Both prospects have a combined target gross mean prospective resource of 68mmboe, with further potential upside estimated at 129mmboe on a gross basis. The chances of success are 27% and 22% respectively, with key risks related to fault seal and phase risk.

Hammer added: “The exploration programme over the next 18 months offers shareholders a unique opportunity to gain exposure to a drilling portfolio of seven wells, targeting net mean prospective resource potential of 104mmboe, with an additional 220mmboe of upside. This provides the potential to create a net asset value of over $1bn, based on precedent transactions in the Norwegian North Sea for development assets”.

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