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(Sharecast News) - Jersey Oil & Gas announced a significant development in its operations in the UK Continental Shelf region of the North Sea on Friday.
The AIM-traded company and NEO Energy, the owners of the Buchan field licences, successfully executed agreements to acquire the 'Western Isles' floating production, storage, and offloading (FPSO) vessel.
It described the acquisition as a pivotal step in the planned redevelopment of the Buchan field.
The Western Isles FPSO has been operational since 2017 and is active in the UK North Sea.
Jersey Oil said it would receive a substantial cash payment of $9.4m from NEO Energy as part of the agreement.
That payment was a significant milestone in the farm-out initially announced on 6 April and related to the finalisation of the Greater Buchan Area (GBA) development solution.
The firm said it was making substantial progress in its efforts, with a focus on front-end engineering and design (FEED) activities.
Jersey Oil said the activities were essential to obtaining field development plan (FDP) approval in 2024.
"Finalising the terms for the joint venture partners to acquire the FPSO, which is less than eight years old and requires relatively modest adaptation for our planned GBA redevelopment, is a tremendous milestone for the project," said chief executive officer Andrew Benitz.
"Re-using existing high-quality infrastructure and modifying it to be electrification-ready is exactly in line with our stated low carbon strategy and the net zero related objectives of the industry.
"The vessel is the cornerstone to completing the engineering work required to facilitate FDP approval for the Buchan redevelopment next year."
At 1213 GMT, Jersey Oil & Gas shares were up 11.78% at 213.5p.
Reporting by Josh White for Sharecast.com.
