The two players reached an agreement in May 2023, enabling JAPEX to make a significant investment into Longboat’s Norwegian subsidiary, Longboat Energy Norge. The formation of the JV was subject to certain approvals.
Come June 2023, Longboat Energy confirmed that the Norwegian Ministry of Petroleum and Energy gave its approval to the formation of the JV, which was the key regulatory approval sought. As a result, the completion of the transaction was now expected to occur in the first half of July 2023.
This has now been completed with the initial investment of $16 million received by the renamed entity Longboat JAPEX Norge. As part of the transaction, Longboat JAPEX will use part of the JAPEX investment to repay an intercompany loan of NOK 45.5 million (approximately £3.5 million) to Longboat Energy.
Furthermore, the contingent consideration of $4 million, payable by JAPEX into the JV, associated with the recently announced acquisition, will be paid on completion of that transaction which is anticipated toward the end of the year.
In addition, the third tranche – known as the Velocette tranche – of up to $30 million is contingent on a successful discovery at the Velocette well, which is expected to be spudded in September. The amount payable under the Velocette Tranche is based on a sliding scale applied to the gross resources approved for development by the Norwegian Ministry of Petroleum and Energy.
Having completed the transaction, the $100 million acquisition financing facility to finance acquisitions and associated development costs has been established and is available for drawing by the JV. Longboat JAPEX is owned 50.1 per cent by Longboat and 49.9 per cent by JAPEX.
Helge Hammer, Chief Executive 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.”
