Last checked at 20 May 2020 07:00
20 May 2020
Jersey Oil and Gas plc
("Jersey Oil & Gas", "JOG" or the "Company")
Completion of the acquisition of Equinor UK's interest in Licence P2170
Jersey Oil & Gas (AIM:JOG), an independent upstream oil and gas company focused on the UK Continental Shelf ("UKCS") region of the North Sea, is pleased to announce that it has completed the transaction to acquire operatorship of and a 70% working interest in Licence P2170 (Blocks 20/5b and 21/1d) ("Licence P2170") from Equinor UK Ltd. ("Equinor UK") (the "Acquisition") as announced on 27 January 2020. The consideration for the Acquisition consists of two milestone payments and a royalty based on volumes produced from the Verbier Upper Jurassic (J62-J64) reservoir oil discovery (the "Verbier discovery").
The Acquisition, which is not subject to upfront cash payments, provides JOG with an opportunity to create significant value through potentially developing the Verbier discovery as part of the Greater Buchan Area ("GBA") hub. Licence P2170 also benefits from multiple material exploration prospects that have high value potential through tie-backs to the proposed new GBA hub.
Andrew Benitz, CEO of Jersey Oil & Gas, commented:
"I am pleased that JOG has completed this important step to acquire an additional interest and operatorship in the Verbier discovery together with material exploration upside to facilitate our plan to develop Verbier as part of our GBA development. We continue to make solid progress on concept select for the GBA and work closely with contractors, other area stakeholders and the OGA on this important project."
Enquiries:
Jersey Oil and Gas plc
| Andrew Benitz, CEO | C/o Camarco: Tel: 020 3757 4983 |
Strand Hanson Limited | James Harris Matthew Chandler James Bellman | Tel: 020 7409 3494 |
Arden Partners plc | Paul Shackleton Benjamin Cryer | Tel: 020 7614 5900 |
BMO Capital Markets Limited | Jeremy Low Tom Rider | Tel: 020 7236 1010 |
Camarco | Billy Clegg James Crothers | Tel: 020 3757 4983 |
Terms of the Acquisition
The consideration for the Acquisition consists of two milestone payments and a royalty based on volumes produced from the Verbier Field, as outlined below:
· Milestone Payments:
- US$3 million upon the UK's Oil & Gas Authority ("OGA") sanction of the Field Development Plan ("FDP") for the Verbier Field
- US$5 million upon first oil from the Verbier Field
· Royalty Terms:
- A gross revenue royalty on the oil production generated from the Verbier Field calculated on a 70% working interest for on-block volumes at the following levels:
§ 5% for the first 12 million barrels of oil produced and sold
§ 4% for the subsequent 13 million barrels of oil produced and sold
§ 2% for the next 10 million barrels of oil produced and sold
Notes to Editors:
Jersey Oil & Gas is a UK E&P company focused on building an upstream oil and gas business in the North Sea. The Company holds a significant acreage position within the Central North Sea referred to as the Greater Buchan Area, which includes operatorship and 100% working interests in blocks that contain the Buchan oil field and J2 and Glenn oil discoveries and an 88% working interest in the P2170 Licence, Blocks 20/5b & 21/1d, that contains the Verbier oil discovery.
JOG's acreage is estimated by management to contain more than 140 million barrels of oil equivalent ("boe") of discovered mean recoverable resources net to JOG, in addition to significant exploration upside potential. JOG is currently progressing the concept select phase of an FDP for the Greater Buchan Area.
JOG is focused on delivering shareholder value and growth through creative deal-making, operational success and licensing rounds. Its management is convinced that opportunity exists within the UK North Sea to deliver on this strategy and the Company has a solid track-record of tangible success.
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014.