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(Sharecast News) - UK continental shelf-focussed oil and gas company Jersey Oil & Gas updated the market on its licences P2497 Block 20/4c 'Zermatt', and P2499 Block 21/2a 'Glenn' on Wednesday.
The AIM-traded firm said that, after a "comprehensive" technical and economic evaluation of the licences, and recent meetings with the Oil and Gas Authority (OGA), the regulator had confirmed that it was satisfied that the phase A firm commitments for both licences had been fulfilled.
Jersey Oil said it had decided not to progress to the next licence phase, which would have required committing to a firm well in each of the two licence areas.
As a result, the licences would automatically cease and determine at the end of phase A of their initial term on 29 August.
As it said on 3 March in its Greater Buchan Area development concept update, the company said the selected concept for the development was planned to be executed in three phases, and neither Glenn nor Zermatt were included in any of those phases.
In the case of Glenn, that was due to the current sub-commercial status of the Glenn and Glenn North oil discoveries, and in the case of the Zermatt licence, it was after taking into account the higher ranked, drill-ready portfolio of exploration opportunities in Licence P2170 'Verbier'.
With Glenn and Zermatt not featuring in the Greater Buchan Area development plans, the licence determination did not impact the company's farm-out process for the area, which was ongoing.
"Jersey Oil & Gas' management has taken the pragmatic and cost-effective decision not to proceed with firm well commitments for the non-core Glenn and Zermatt licences in the context of efficient and targeted capital allocation," said chief executive officer Andrew Benitz.
"Jersey fully respects the OGA's asset stewardship expectations which govern the delivery of exploration and appraisal work programmes, and we continue to work closely with the OGA as we progress our plans for the company's core Greater Buchan Area development project."
At 1408 BST, shares in Jersey Oil & Gas were down 2.88% at 118p.
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