Longboat Energy forms JV with Japan's JAPEX in Norway

Longboat Energy, a full-cycle exploration and production (E&P) company, has successfully completed its transaction with Japan Petroleum Exploration Co. (JAPEX) to establish a joint venture in Norway, it said on July 17.

The initial investment of $16mn has been received by the newly renamed entity Longboat JAPEX Norge. A portion of the JAPEX investment will be used to repay a NOK 45.5mn intercompany loan to Longboat Energy.

The contingent consideration of $4mn, associated with the recently announced production acquisition, will be paid by JAPEX into the joint venture upon completion of the transaction, which is expected later this year.

The third tranche, known as the Velocette Tranche, amounts to up to $30mn and is contingent upon a successful discovery from the Velocette well. The well is scheduled to be drilled in September. The payment under the Velocette Tranche will depend on a sliding scale based on the gross resources approved for development by the Norwegian ministry of petroleum and energy.

With the completion of the transaction, the acquisition financing facility of $100mn, intended for financing acquisitions and associated development costs, has been established and is available for drawing by the joint venture, the company stated.

"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,” Helge Hammer, CEO of Longboat, said.

"In the near term, we are looking forward to the drilling of the high-impact Velocette exploration well (JV 20%) which is expected to spud in September,” Hammer added.

Longboat JAPEX is owned 50.1% by Longboat Energy and 49.9% by JAPEX.