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(Alliance News) - Jersey Oil & Gas PLC on Monday announced the acquisition of a further 70% in the licence containing the Verbier oil discovery.
Jersey, which is based in St Helier on the island of Jersey, currently holds 18% of licence P2170, and has taken another 70% from Equinor SA.
The company will pay USD3 million once a field development plan for the Verbier field gets UK Oil & Gas Authority approval, and then another USD5 million from first oil. Further, Equinor will get royalties on the first 35 million barrels produced.
This deal, Jersey said, adds 17.5 million barrels of oil equivalent to its resources at the Greater Buchan Area, to 142 million barrels. It also adds USD506 million of post-tax cashflow in future, Jersey believes.
"Acquiring further discovered oil volumes enhances Jersey's project value considerably and at the same time strengthens our plan to bring Verbier into future production through the Greater Buchan Area development, which is a truly exciting opportunity to showcase what is possible with new developments in the UK Continental Shelf," said Chief Executive Andrew Benitz.
"We are working closely with the OGA and leading contractors to introduce technologies to enable the Greater Buchan Area development to be at the forefront of the energy transition as well as being a new area hub that encourages regional industry collaboration to maximise the economic recovery of resources in this prolific part of the central North Sea."
"We are now well placed to progress our development plans through concept select, before launching a farm-out process to attract industry partners to join us in unlocking the significant value that exists within the Greater Buchan Area," he added.
Jersey had a 2019-end cash position of GBP12 million, it added, and is fully funded until the second quarter of 2021.
Shares were 7.6% lower on Monday morning in London at 127.00 pence each.
By George Collard; georgecollard@alliancenews.com
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