Seascape Energy Asia (LSE:SEA) — Investor Presentation

0:02 Good morning, and welcome to the Longbow Energy PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be placed at any time via the Q and A tab situated in the right corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Helge Hammer, CEO. Good afternoon to you, sir.

0:34 Thank you, Alessandro, and good morning, everyone. I'm Helge Hammer. I'm the CEO of Longboard Energy. And with me this morning, I have Nick in Grosia, our corporate development director. We will give you a run through of the company presentation. This follows AGM, which we just held here in London.

0:59 So to start with, I mean, just a very quick reminder, I mean, we we are longboard energy looking to grow an E and P business, very active in Norway and have did did our first deals last year and have been a very active driller in on the exploration side of Norway for for the last year. We've drilled six wells. We made three discoveries, so 50% success rate. As many of you shareholders would know, our last well was Camposola was a disappointment. Unfortunately, we're also disappointed about that. But ahead of us, we have three three key wells, big big targets. We'll come back to them in in a minute.

1:48 We are in in a good position as a company. We are funded for for everything we have ahead of us, and and we also have a a credit facility, which which is secured against Norwegian tax refund. So Norway remains a very attractive place to to be operating. As you can see from the graph there, very good exploration results.

2:14 We we also like Norway because of the the ESG side of things. The Norway has very low c o two emissions on its its production, both gas and oil, can actually deliver a gas to The UK at lower lower emissions than The UK can themselves. That's because Norway can exploit its hydroelectric power. And we are in a very attractive country, a search for building up an energy business and and being an important provider of energy to to Europe. We should take a bit closer look at our discoveries, I'll hand over to Nick to take us through that. And then I'll come back and talk about the wells that we have ahead of us. So over to you, Nick.

3:07 Thank you very much, Helga. Good morning, everybody. My name is Nick. Remote. I'll just take control here. Yeah. We'll just do a quick run through our discovery so far to date, and then I'll hand back to to Helga to go through our upcoming exploration program. So why don't we kick off talking about our most recent discovery, Cavaisia? This was a very exciting well that we drilled a couple of months ago. It was a Equinor operated discovery near near Troll. They discovered, you know, between thirty and fifty million barrels of of recoverable resources, and it's an injectite play. So that's a play that that is kind of emerging in Norway as well as in The UK, fields like Catcher, people may be aware of, which was owned by Premier and now by Harbor.

4:01 And these fields are defined usually as being very prolific. They tend to overperform because of the nature of the reservoir. We also found oil at two secondary targets as part of the exploration and certainly the main secondary target, the rock up was a very interesting upside potential elsewhere on the block. This area itself has been very, very interesting, and it's one of the key areas that we think Equinor is going be focused on in the coming years. Kvaische itself is one of the biggest discoveries this year in Norway, and this falls on from a number of discoveries in the area where Equinor is looking to put together a an area wide development through some of their infrastructure around the the the supergiant troll field.

4:54 Process is very exciting because we we we will get to benefit from the from the shared infrastructure cost, the economies of scale, Equinor being a developer across there. And we also think that this will lead perhaps to opportunities for early monetization of Glacier. We only have a small piece of a much bigger puzzle. We know there are lot of people who are interested in the area. And as I think we commented recently, we are committed to creating shareholder value and considering early monetization of these

5:27 types of assets, which has always been part of the strategy, whether or not to to sort of sell or to swap for production. But but we believe this is a a very interesting and attractive asset to a lot of people in the area.

5:44 Egyptian vulture was one of our first discoveries that we made. It's a Nelsgaard area. It's a very, very large discovery in terms of its aerial extent over 80 square kilometers with a very large in place volume range. It's a light oil discovery with good prosties at the top of the at the top of the reservoir. The resources still are in a wide range partially because of the of the wide area of the extent. And I think it's it's one of these ones where where an appraisal well will help unlock this this discovery and hopefully move it towards towards production. The strategy for the appraisal would be to prove up the lateral extent of it, confirm where the oil water contacts are, and and to test the reservoir flow potential.

6:30 We continue to work very closely with Equinor, who is the operator, on the technical work that needs to go into this in order to to firm up the appraisal program, and we're hoping we'll have more information on that towards the end of the year. There's a lot of, again, development that's going on in this area being led by Equinor, and so we're confident that that we will move forward with the vulture in a timely fashion.

7:00 And finally, one of the smaller discoveries we made towards the beginning of the program is Rut Hatta. Was up in the Barents Sea. This was a a good discovery, albeit slightly at the smaller end of of expectations. Albeit despite being small, it is very close to the to the Goliath field where we have Voor ENERGY, who is is the operator, and the fact that the operator of both, they are looking for additional volumes to put through that field. And we also have seen progress recently with regards to CCUS up there and the monetization of gas resources through an ammonia plant, which is being planned by several of the parties who are also a part of the Red Hat discovery and Norwegian listed horizontal energy.

7:52 So we think this is an exciting area, albeit somewhat smaller in our portfolio. But again, we remain hopeful that that this will move forward and and it becomes another piece of a puzzle, which we will hopefully be able to use in order to create transaction optionality

8:11 elsewhere in the portfolio. So those are our three discoveries we've made to date. Very proud of all of those. And maybe you hand back to Helga now to go through our upcoming exploration. Thank Thank you, Nick. Yes. So we have three wells ahead of us, three key wells. I think what's different with these wells from some discoveries we made, they're all large, and they're all they're all gas, and they're all near infrastructure. So they they they tick the boxes that we we're really looking for. This this next one here is called Ousvik. It's operated by OMV, Austrian company. Very good relationship with them. This this well is targeting a Jurassic four block. So so so this is a much more classic exploration target than Cambosola, which was a play opener, would have been really exciting. But but here we are on more kind of common and and and and very well understood type of exploration play.

9:14 The the well is expected to spud in the middle of July and have two two horizons that are target horizons in Jurassic. It's located right in the middle of Norwegian North Sea infrastructure next to the Ussberg Field. On one side, it has the Martin Ling on the other side. There are gas pipelines from both Ussenburg and from Martin Ling and and and multiple other pipelines in this area. So it's it's excellent address for for finding more volumes and for commercializing. Also, a lot of big players, very, very active in this area. Oseberg Field, for example, is going to be electrified. It was just announced.

10:04 So so this is a really key well for us, big, big value catalyst, and which I know we are all looking for. And then not long after this well, we have another big one coming up. That's, like, probably a couple of months two two to three months away from Spud. This is Copernicus. It's further north. It's sitting next to the Osterhunsteen Field just to the East, and it's potentially very large to over 250,000,000 BOE gross with 10% of this. So another one that can make a huge difference to the to the valuation of longboard if it comes in.

10:52 Here we have we're working with is the operator. That's the Polish oil and gas company. They're doing very, very well in Norway. Big big big player now. And and this is together with them and Equinor. So another one to look forward to, slightly higher risk. Ulfig is thirty six percent chance of success. This is 26% chance of success. And then we have the the last one in the program, in the current program, is Velocet. Velocet will be drilled early next year early spring of next year. It's a well also operated by OMV.

11:40 It's it's South Of Coppanica, so in the same area would be same same host facility if it comes in as a discovery. The additional excitement with this one is large, but it's not only large. It also multiple additional targets that would be derisked if this work this work comes in. This is also structural closures here with seismic anomalies on them. So a really quality exploration target.

12:17 So that's kind of the wells. And then we continue to be active actively chasing m and a opportunities, and I'll I'll hand over to in in in a difficult market, I would say, I'll hand over to Nick to give you a bit more input on that. Thank you, Helga. So just a little bit about the market. You know, we we've always set out that we're gonna build this business both organically and inorganically, and we have been hard at work reviewing many opportunities, actively making offers on numerous assets, and we're really looking across the spectrum. So we've always wanted to add production, whether or not we can have near term production at a price that is value accretive has been the challenge

13:07 as we've seen commodity prices spike during the first quarter following the tragic events in Ukraine. And and so that is really presenting challenges between sort of buyer seller seller sort of delta in terms of value. What we've been seeing as well is in The UK, we've had a huge amount of fiscal uncertainty. We rolled out of out of, I think, an overreaction to COP twenty six and straight into a situation where security and supply, has become a real and serious issue here. Albeit the government has put, you know, a further tax burden on the industry, in many ways discouraging investment. Those those rules will seek to be clarified towards the end of the year, meaning The UK is is is is a challenging place also to do transactions at the moment.

14:01 What we've seen is is a real transformation on Norway where we've seen a huge amount of private and private equity led transactions really taking the floor, which has been a challenge to compete against at times, which has pushed us down a road of of looking at more interesting transactions, more niche where we can where we can add value. Unfortunately, again, it's been a struggle given the commodity price environment. Though we do have a I believe we have a good competitive advantage given the limited number of companies in Norway, the high barriers for entry there. And we have an excellent team, that allows us to sort of really get through evaluations of assets in a in a quick and consistent way so that we can identify the real opportunities that we wish to pursue.

14:54 As I mentioned, we have delved into a vast amount of detail on on a number of transactions and and made offers, firm and indicative offers for a number of

15:03 assets. Just unfortunately have been unable to close those in a challenging market, which is I don't think you need to to longboat. Look. We're we're still actively using our our discoveries as potential for swap currency. You know, we've mentioned that in our most recent operational update, and we're continuing to pursue that actively.

15:26 And we believe there is interest, especially in assets like Gevaischa where where there's a lot of activity going on. The tax changes recently in Norway should help us as well to to consider moving forward with some of these assets into development should we not be able to realize the the value we believe are in these discoveries. But it also potentially makes acquisitions of developments more attractive because of the working capital

15:52 requirement reducing significantly. But the thing I really would stress is that patience is key. We are all large shareholders in this business in addition to to hopefully many of you on this call today, and it's most important for us to get maximum value for shareholders. And and so we are we are trying to to remain rigorous in our reviews and be very disciplined when it comes to deploying capital. You. Thanks, Nick. And just to summarize then, so we are in the middle of a program. We drilled six wells. We made three discoveries, and we have three exciting wells ahead of us. And we continue to to look for opportunity to to to grow further both through attractive and compelling deals and and also using our discoveries as trading chips. And I would say, so

16:49 far so good. Disappointing with the Cambusola well, obviously, and and we've seen the reaction is quite strong. But, you know, it doesn't it doesn't stop us from just gonna keep keep going here, and there's some big catalysts ahead of us. Thank you, everyone. I think we'll move to Q and A. Hello, Nick. Thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just using the Q and A tab, which is situated in the top right corner of your screen. I'd just also like to remind investors that recording of this presentation, along with a copy of the slides and the published Q and A can be accessed via your investor dashboard. Nick Hagel received three pre submitted questions from investors, and I want to start off the Q and A session with these. The first one reads as follows: Longboat Energy floated at £1 followed by the second raise at 70 p. Investors have waited patiently for over two years for current exploration strategy to deliver returns. Does the board have a timescale within which they hope the company will add production and start generating revenue?

17:50 Right now, the company is valued at less than cash in the bank.

17:55 Okay. The the current share price is very disappointing as as we said, and it follows Cambusola dry well results where where expectations were high. However, we already have three discoveries in the drilling campaign, and we have three very promising prospects ahead of us. Husvik and Kopanikas will spud within the next few months, and and they are large prospects with with huge potential. And and adding production and cash flow through swaps, I mean, is still very much to be active, But but, you know, the current market is tight, and and as as Nick said, there has to be an element of patience. But we we are moving forward with these plans. Thanks very much. That's great. The next question reads as follows. Without giving details, is the firm in active discussions over buying or swapping into producing assets?

18:46 I mean, we we we can't comment on on being an active process, obviously. But the commercialization of our discoveries is a key part of the strategy. A lot of dialogues are ongoing, and we'll pursue opportunities to swap

19:03 actively. It's worth noting that the current very high returns being generated by producing assets is not in our favor in that respect. Thanks. And just turning to the next question. Longboats are currently recruiting for a safety and sustainability manager. Given Longboats are not operators of any license, can you explain to shareholders why this recruitment is taking place? Yes. The unlike in The UK and Norway, all companies, you know, have having holding oil and gas assets are obligated to have a minimum number of technical and operational staff as part of the prequalification process. And and having an HSE manager is is a requirement.

19:49 There's a specific requirements. So just just note that this is a this is was a vacancy. Yeah. It's not it's not an additional comp cost to the company. Thank you very very much. Hugo, that actually concludes the pre submitted questions. But as you can see, we've received questions throughout today's presentation, and thank you to all the investors for submitting those. Could I just ask you to read out the questions and give response to where it's appropriate to do so? And then I'll pick up from you both at the end. Thanks. Thanks. So first question here is what is our view on the oil price going forward? Maybe, Nick, you could comment a little bit on that. Look. One of the things I think was a big success at at Barrow before before this business and a number of business I've been in previously has been trying not to take huge directional bets on the oil price. There are other ways for investors to do that. For us, it's trying to create value throughout the cycle.

20:52 We sort of we obviously constantly keep appraised of of where prices are to make sure that we're competitive when we're looking at m and a situations and making sure that in situation where we might be a seller, we're getting maximum value for the potential of our assets. So so that's all I would say, I think, on the prices. Thanks, Nick. We have a we have a quite a few questions that are about share price being low and and a bit of impatience of of seeing us do something more. And I think we have we have actually answered that through through the presentation. So I'm not gonna I'm gonna skip some of those questions, so so don't don't don't feel that I'm ignoring it. But I think it's a bit boring to repeat repeat those answers.

21:44 I have a question here. When do you expect Longboat to start making money? Yeah. That's a that's a difficult one to answer. And, Nick, I think it's it's one for you again. How long is it gonna take before we buy production? And I think it's the same question. No. Look. Again, there've been actually very few production deals done in Norway or in The UK this year. The the transactions that have occurred have been very sort of specific special instances. There was a very, very large transaction done between Equinor, the sort of quasi state company, and a billion dollar private deal with with a private equity backed business. And there was also a smaller deal done with an incumbent operator.

22:30 Okaya also listed on the on the exchange in in Oslo. They have set themselves up to to really sort of own and operate large platforms with with hundreds of people in in multiple locations. That has never really been the strategy. It's something that we consider from time to time, but we felt that, you know, being a more nimble business able to kinda do different things and get into different areas and and really be an active non operated partner is is where our core skill set lies. So so we haven't been chasing transactions like that. Other than that, there really have been no production deals done in in Norway, and and there's been almost nothing moving in The UK. And and this is not because there's tons of stuff going on in the background.

23:15 There's very little going on at all. We remain in dialogue with with lots of people. We have an excellent network. We spend a lot of time talking and looking at opportunities, pitching ideas. And I think we're probably as impatient as as the rest of our shareholders are to to to build this business. I can assure you that we are working day and night to do that. And I'm confident that we will position this business for growth in the near term. Thanks, Nicky. Then we have a question here. Do you think current share price fairly reflects drilling results so far? Question is the answer is no, obviously.

24:00 I mean, I think share price is is result of some, you know, emotional reactions to recent wells and and and kind of just just the selling and buying of of the stock. I think the the the fundamentals are are that we are we have three discoveries that all have value. We have three three big catalysts ahead of us. I think we'll take one more question. And there's another question. What is your current cash balance? Which, obviously, we also cannot cannot say, but our gross cash was 26.1.

24:50 That that's still the case because we have paid for a reason why it's with the EFF, which we've drawn on. And and the balance sheet is good in the sense we have we have the cash and we have the facilities in place to to pay for the wells that we have ahead of us. So with that, I think we'll we'll end this session. Helga, Nick, thank you very much for that. I think you've addressed those questions you can from investors. And of course, the company will review all questions submitted today and will publish their responses on the Investor Meet company platform. But just before we redirect investors to provide you with their feedback, I know is particularly important to the company, how could I just ask you for a few closing comments? Yeah. Thanks. Thanks, Alessandro. Yeah. Well, as a closing comment, I'll just, again, repeat that. I mean, we we are making good progress. We we have some exciting wells ahead of us.

25:44 So don't lose faith. This is this is all very, very exciting times ahead, and we also have some really exciting m and a opportunities that we're looking at. So with that, I'll I'll thank you all for your attention. Thanks a lot. Hilda and Nick, thanks once again for updating investors today. Could I please ask investors not to close the session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few minutes to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of Longbow Energy PLC, we'd like to thank you for attending today's presentation, and good morning to you all.