17 July 2023

                                                                                   Longboat Energy plc                                              

("Longboat Energy", the "Company" or "Longboat")

Transaction to create Norwegian Joint Venture with JAPEX completed

Longboat Energy, the full-cycle E&P company, is pleased to confirm that its transaction with Japan Petroleum Exploration Co., Ltd ("JAPEX") to establish a joint venture in Norway has now been completed with the initial investment of US$16 million received by the renamed entity Longboat JAPEX Norge AS ("Longboat JAPEX" or the "JV"). 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.

The contingent consideration of US$4 million, payable by JAPEX into the JV, associated with the recently announced production acquisition, will be paid on completion of that transaction which is anticipated toward the end of the year.

The third tranche (the "Velocette Tranche") of up to US$30 million is contingent on a successful discovery on 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.

Having completed the transaction, the US$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% by Longboat and 49.9% 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.

"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."

The information contained within this announcement is not considered to be inside information prior to its release.

Background

Longboat Energy was established at the end of 2019 to create a full-cycle E&P company through value accretive M&A and near-field exploration. Since June 2021, Longboat has entered a series of four transactions to acquire interests in a portfolio of nine gas-weighted exploration wells drilling on the Norwegian Continental Shelf close to existing infrastructure. To date, eight of these wells have been drilled resulting in five hydrocarbon discoveries, representing a technical 63% success rate.

In February 2023, Longboat entered Malaysia through the award of a Production Sharing Contract for Block 2A, offshore Sarawak. Block 2A covers approx. 12,000km² and is located in water depths of between 100-1,400 metres where a number of large prospects across multiple plays have been identified, with significant volume potential representing multiple trillions of cubic feet of gas.

In May 2023, the Company announced that an agreement had been reached with Japan Petroleum Exploration Co., Ltd ("JAPEX") to make a significant investment into its Norwegian subsidiary, Longboat Energy Norge AS ("Longboat Norge"), to form a joint venture.  Under this agreement, JAPEX will make a cash investment of up to US$50 million for 49.9% of Longboat Norge and provide the JV with a US$100 million Acquisition Financing Facility to finance acquisitions and associated development costs.

In July 2023 the Company announced the acquisition of its first producing interests in the Statfjord Øst Unit and Sygna Unit located on the Norwegian Continental Shelf

Longboat's activities remain focused on creating a portfolio with a clear low-cost route to monetisation and low-carbon drilling and development opportunities, well aligned to Longboat's ESG targets which include a corporate 'Net Zero' on a Scope 1 and 2 basis by 2050.

Related Party Transactions

Acquisition Bridge Facility: As announced on 2 May 2023, JAPEX has provided Longboat JAPEX with a five-year, US$100 million Acquisition Financing Facility (the "Facility") to finance acquisitions and associated development costs. The Facility is available for drawing for the first three years subject to certain conditions, including mutually agreed acquisitions by the Joint Venture. The Facility will attract a market-rate of interest on an increasing scale over its tenor with an initial rate of 6% in the first year, rising to 13% in year five, resulting in an all-in cost over the term of less than 10%.  Whilst no amounts have been drawn on the Facility to-date, by the nature of JAPEX being a related party to the Company following completion of the JAPEX transaction, future drawings and payments under the Facility will constitute related party transactions under AIM Rule 13. The Company's directors consider, having consulted with Stifel, the Company's Nominated Adviser, that the terms of Facility are fair and reasonable insofar as shareholders are concerned.

Secondment Agreement: Under the terms of the Investment Agreement between the Company and JAPEX dated 28 April 2023, at completion Longboat JAPEX shall enter into a Secondment Agreement with JAPEX which entitles JAPEX to second employees to Longboat JAPEX (the "Secondment Agreement").  Under the terms of the Secondment Agreement, Longboat JAPEX will pay JAPEX a secondment fee and meet the living and other expenses of the seconded employees in Norway together with any associated payroll taxes which is expected to be circa £0.3 million for the remainder of 2023 and approximately £0.8 million in future full year periods. This may increase by circa 20% in 2024, up to £1.0 million, as a result of JAPEX increasing the number of seconded employees to the maximum allowed under the Secondment Agreement. The payments to JAPEX from Longboat JAPEX Norge AS under the Secondment Agreement are expected to classify as related party transactions under AIM Rule 13. The Company's directors consider, having consulted with Stifel, the Company's Nominated Adviser, that the terms of the Secondment Agreement are fair and reasonable insofar as shareholders are concerned.