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Jersey Oil & Gas looks forward to North Sea drilling and more deal making

Published: 07:48 29 Sep 2016 BST

Offshore oil operations, North Sea
Banks are expected to support an acquisition with reserves based lending

Planning is due to start this year for Jersey Oil & Gas PLC’s (LON:JOG) first North Sea exploration well in partnership with Statoil, so that drilling can potentially take place in 2017.

Jersey Oil & Gas agreed the deal to bring in the Norwegian oil major into the North Sea exploration venture in August and the AIM-quoted junior says work is currently focussed on obtaining the customary regulatory approvals to complete the farm-out.

It also targets an acquisition of producing assets, and it is having talks with a major bank, which is described as ‘keen to support’ the company by potentially providing reserves based lending against the assets it may acquire.

Jersey told investors it continues to “work actively” on a number of opportunities in the UK, which it expects will lead to the acquisition of producing oil and gas assets in the near future.

Andrew Benitz, chief executive, said: “I am pleased to report to shareholders that we have delivered on part one of our stated strategy, which was to crystallise 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.”

He added: “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.”

The company – which emerged last year from the wreckage of Trap Oil – does not have any revenue generating assets and it reported a £210,837 loss for the six months ended June 30.  It exited the first half with £582,154 of cash and equivalents.

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