29th May 2024 12:24
(Alliance News) - Longboat Energy PLC shares plummeted on Wednesday, as the company reported the troubling performance of a Norwegian asset due to significant delays in well completions.
Shares in the Norway and Malaysia-focused oil and gas exploration company fell 57% to 7.69 pence each in London on Wednesday.
This came after Longboat reported a "disappointing" performance from the Statfjord Satellites, offshore Norway.
Longboat holds a 4.8% interest in the Statfjord Ost unit, and a 4.3% interest in the Sygna unit.
Production at Statfjord has averaged around 401 barrels of oil equivalent per day in the period from January to April, "significantly below" both Longboat's internal forecasts and those of the project's operator, Equinor ASA EQNR.
Longboat says the underproduction relates to delayed well completions at Statfjord Ost, with two of the five redevelopment wells drilled in 2023 still off-line.
While the Sygna unit continues to perform in line with expectations, this remains at low levels, Longboat said.
Due to uncertainty over the Statfjord Ost wells, Longboat now anticipates average production of between 575 and 625 boepd in 2024 net to Longboat Japex Norge AS, Longboat's Norway-focused joint venture with Japan Petroleum Exploration Co Ltd.
As a result of the low production forecast and ongoing operational issues, Longboat said that the Statfjord Ost 2024 capex budget has almost doubled to NOK685 million, GBP51.1 million.
Longboat also noted "frustratingly slow" progress on moving forward the Kveikje discovery, in which LJN holds a 10% stake.
This is due to differing opinions on the best offtake solution for Kveijkje from the project's partners, the company said, leading to involvement from Norway's energy regulator to resolve the dispute.
"Longboat believes that Kveikje continues to hold significant value for shareholders but recognises that this is likely to take longer to realise than previously anticipated," the company said.
In Malaysia, Longboat said that progress continues to be made on the company's 53% owned Block 2A, located offshore Sarawak.
By Hugh Cameron, Alliance News reporter
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