Malcy3 Mar 2021 15:44
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Oil price, JOG, Reabold. And finally…
3 March 2021|Categories: Daily Blog|Tags: Jersey Oil & Gas., Reabold Resources|0 Comments
WTI $59.75 -89c, Brent $62.70 -99c, Diff -$2.95 -10c, NG $2.84 +6c, UKNG 40.05p -1.14p
Oil price
Oil drifted yesterday ahead of tomorrow’s Opec+ meeting where decisions will be taken with regard to output from April onwards. Although there have been some jitters, not surprising given the current oil price, so far there have been few in real panic. Indeed the noises from the Opec+ committee have been positive with regards current production and also significant stock withdrawals expected this year.
The API stats after the close were as expected all over the place following the bad weather in Texas last week. And they were, crude built by 7.4m barrels when the market had expected a draw but products reversed that with huge draws in both gasoline and distillates of over 9m b’s. The market understood all that and the oil price is up nearly a dollar a barrel as I write.
Jersey Oil & Gas- A red letter day indeed…
JOG has announced the Greater Buchan Area Concept Select Update which gives ‘potential for 172 MMboe of 2C contingent resource estimates to be developed from a fully electrified platform’. This is indeed what the market has been waiting for, a really thorough piece of work which shows the quality of project JOG has on its hands and how it has prepared for the next momentous step, that of starting the farm-out process.
The planned development is centred on resuming production at the Buchan oil field and producing the J2 and Verbier oil discoveries as well as other existing and yet to find discoveries within the GBA as future upside. A three-phase development centred around a single integrated wellhead, production, utilities and quarters platform located at the Buchan field – the GBA hub.
The development concept is based on P50 Technically Recoverable Resource estimates of, in aggregate, 172 MMboe of light sweet crude and associated gas within the Core GBA, which includes the Buchan oil field and J2 and Verbier oil discoveries.
Critically, JOG aims to deliver production from the planned GBA Development Project at an industry leading carbon intensity level due to Platform Electrification, as seen in certain fields in the Norwegian sector and with overall carbon emissions from the GBA with platform electrification estimated by management at <1kg/boe.
The effect that these actions are immense, ‘project economic estimates by management for the Core GBA selecting Platform Electrification as our preferred low carbon power solution, are pre-tax free cashflow of $6.4 billion with an NPV (pre-tax) of $1.7 billion giving a payback period of under 3 years with a project internal rate of return (“IRR”) greater than 25%’.
‘Development costs (Capex and Opex) based on today’s values are estimated to be approximately $30
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