Longboat Energy and Japan Petroleum Exploration (JAPEX) have formed a joint partnership with an initial investment of around £12.23 million.
The new entity, Longboat JAPEX Norge AS, will use part of the JAPEX investment to repay an intercompany loan of around £3.5 million to Longboat Energy.
Longboat Energy owners a slightly higher share in the joint venture, claiming 50.1%, while JAPEX accounts for the remaining 49.9% of ownership.
JAPEX is set to pay a contingent consideration of $4 million (£3.06m), which will be paid ” toward the end of the year.”
Up to US$30 million depends on a successful discovery at the Velocette well, which is expected to spud 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.
Once the transaction is completed, the US$100 million Acquisition Financing Facility to finance acquisitions and associated development costs has been established and is available for drawing by Longboat JAPEX.
Earlier this year it was reported that the Japanese private firm was investing $150m over the course of the next three years for the “exploration, development and acquisition of new interests”.
Helge Hammer, chief executive of Longboat, said: “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.
“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.”
JAPEX already has a stake in the Seagull project in the UK North Sea, which it is partnered with BP and Neptune Energy.
However, the decision to focus on Norway for further development of its portfolio is notable in the current tax and investment environment.