RE: MALCY17 Nov 2023 15:03
"This is another piece of good news from JOG who are clearly working extremely hard in order to deliver the GBA in a remarkably short time frame. Firstly it is a really good, young piece of kit, I think that it is a really good boat and has only been operating since 2017 which makes it a perfect fit for Buchan and I’ve seen a few FPSO’s…
Costs will be within the capex as defined in the FEED process which is making ‘good progress’ as is the FDP where the draft and environmental data is expected to be submitted later this year with approval at present hoped for in H2 2024. And of course JOG benefits from triggering of payments following the NEO farm-out, today’s transaction results in a $9.4m credit and another $12.5m on FDP approval.
The company are also in negotiations with regard to further farm-out of the GBA and today’s announcement will surely have accelerated that process, discussions are continuing but there is no formal guidance as to how long it will take. Overall this is a superb result, it gives tangibility to the project both from an investor and an industry perspective and firms up the overall time scale, apart from anything else it proves that electrification and movement towards a low carbon strategy can and will happen and thus this is a leading light project for the whole industry.
I have always said that the value of JOG is significantly above current levels and as progress like this keeps happening that value realisation becomes more visible. The GBA project is of such scale that once it is fully underway my Target Price for JOG of £10 per share could easily be an underestimate….."
https://www.malcysblog.com/2023/11/oil-price-jog-reabold-and-finally-2/
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