Jersey Oil & Gas
Jersey Oil & Gas announces interim results - updates UKCS operations
Thursday, Sep 29, 2016
Jersey Oil & Gas (AIM: JOG), an independent upstream oil and gas company focused on the UK Continental Shelf region of the North Sea, is pleased to announce its unaudited interim results for the six months ended 30 June 2016.

Highlights

  • Farm-out process launched and post period end completed a successful farm-out of an interest in UK Seaward Licence P.2170, Blocks 20/5b and 21/1d (the "P.2170 Licence") to Statoil (U.K.) Limited ("Statoil")
    • Statoil will acquire an aggregate 70 per cent. working interest in the P.2170 Licence from the Company and CIECO, and will be appointed the designated operator for a total up-front cash consideration of US$2 million, of which US$1.2 million will be payable to Jersey Oil & Gas
    • JOG retains an 18 per cent. equity interest with well carry
    • Statoil to fund all costs up to US$25 million in respect of the first exploration well to be drilled on the P.2170 Licence (the "Exploration Well"), with any cost over-runs to be satisfied by each party in proportion to their working interests
    • The P.2170 Licence area contains two material medium risk oil prospects identified with unaudited estimated mean in place volumes of 300 and 212 million stock-tank barrels ("Mmstb") respectively
  • Sale and Purchase Agreement ("SPA") signed with Azinor Catalyst Limited ("Azinor") for the farm-out of the Group's 50 per cent. interest in Seaward Production Licence P.1989, Blocks 14/11, 12 & 16.
  • Licence P.1610, Block 13/23a ("Liberator"), Licence P.1666, Block 30/11c ("Romeo") and Licence P.1889, Blocks 12/26b & 27 ("Niobe-Kratos") relinquished
  • Actively engaged in pursuing ongoing asset/corporate acquisition opportunities with a further pipeline of potential deal flow
  • Cash at 30 June 2016 of £0.6m
Outlook

  • JOG, CIECO and Statoil are all working towards obtaining the customary regulatory approvals to complete the farm-out of the P.2170 Licence including, inter alia, the consent of the Secretary of State for Business, Energy and Industrial Strategy (the "Secretary").
  • Planning of the Exploration Well on the P.2170 Licence is expected to commence this year, with drilling potentially planned for 2017
  • Discussions continue with a major bank, who is keen to support JOG as a possible provider of Reserve Base Lending against acquired production assets that the Company acquires
  • The Group continues to work actively on a number of possible acquisition opportunities, which it anticipates will lead to the acquisition of UK producing oil and gas assets in the near future
Andrew Benitz, CEO of Jersey Oil & Gas, commented:

'I am pleased to report to shareholders that we have delivered on part one of our stated strategy, which was to crystalise value in the Group's existing exploration asset portfolio.  The farm outs we have concluded have the potential to add significant shareholder value with drilling success and serve to underpin existing value within JOG.

'With respect to the second part of our strategy, the acquisition of production assets, over the past year we have been involved in fourteen sale processes involving more than 40 field interests, a significant undertaking for a team of JOG's size but one that I believe will yield positive results for our shareholders. We remain actively engaged on a number of asset/corporate opportunities, some bilateral negotiations, and we have continued to identify further potential deal flow. With the oil price showing strong support above $40/bbl and often approaching $50/bbl, we are confident that our ongoing production focused strategy remains more relevant and opportune than ever.

'I would like to extend my ongoing thanks to the JOG team for their considerable work effort during the year as well as their ongoing commitment to delivering on our strategy. I would also like to thank our shareholders for their support, which is critical in the early growth stages of this company.  We remain excited about JOG's prospects for the remainder of 2016, through into 2017 in particular the prospect of Statoil drilling in the P.2170 Licence in 2017 and look forward to updating shareholders on our progress in due course.'

For more information, please visit : http://www.jerseyoilandgas.com

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