Each week, Offshore Technology’s writers select a deal that illustrates the themes driving change in our sector. The deal may not always be the largest in value or the highest profile, but it will tell us where the industry is focusing its efforts, and why. This thematic deal coverage is drawn from GlobalData’s Intelligence Centre, which collates information from across the sector.
The deal
Longboat Energy Norge and Japan Petroleum Exploration (Japex) have successfully formed a joint venture (JV) called Longboat Japex Norge. Japex has invested $16m into the new JV, of which Nkr45.5m ($4.5m) will be used to repay an intercompany loan to Longboat Energy. Japex will pay a further $4m into the JV when Longboat’s acquisition of shares in the Statfjord Øst and Sygna oil and gas fields are finalised towards the end of this year. A third funding tranche of up to $30m, known as the Velocette tranche, is contingent on successful discovery of assets at the Velocette well.
Longboat Japex Norge is owned 50.1% by Longboat and 49.9% by JAPEX.
The parties
Longboat Energy is a Norwegian oil and gas company with production licences in Norway and Malaysia. Longboat operates in six fields offshore Norway and one offshore Malaysia. The company is listed on the London Stock Exchange with a value of £27.25 per share at time of writing.
Japex is an oil and gas company established in 1955 with exploration and production interests in Japan, Iraq, Indonesia, Russia, the US and the UK. The company also has interests in biomass and solar power plants, and states that it will “focus [its] management resources on early commercialization of carbon neutral fields such as CCS (carbon dioxide capture and storage)/CCUS (carbon dioxide capture, utilisation and storage); expansion of renewable energy and other environmentally friendly businesses”.
The implications
This JV has launched a new player on the Norwegian oil and gas stage, furthering both parties’ potential to expand operations offshore Norway. With the transaction completed, a $100m Acquisition Financing Facility has been established, a significant sum that can be drawn upon to finance acquisitions and developments in the area. This is Japex’s first entry into Norway’s oil and gas industry.
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By GlobalDataHelge Hammer, CEO of Longboat, commented: “We are pleased that the creation of the Longboat Japex joint venture has completed as scheduled and now look forward to pursuing further acquisitions and opportunities on the Norwegian Continental Shelf to follow on from the first joint transaction announced at the beginning of this month.”
