Proactive Investors - Run By Investors For Investors

Catalysts on the way for Jersey Oil & Gas as Verbier drilling gets underway

Drilling is now underway on the Statoil-led Verbier exploration well, which has the potential to be a game changer for AIM-quoted Jersey Oil & Gas.
Offshore oil operations, North Sea
It will be a 70-day well programme

With the start of drilling on the Verbier exploration well in the North Sea, AIM-quoted Jersey Oil & Gas Plc (LON:JOG) is now positioned for major catalysts.

It was confirmed on Monday that project operator Statoil has now started drilling the Verbier exploration well in the North Sea.

The explorer owns an 18% stake in the Statoil project (it is operator, with 70% of the asset) which is targeting significant potential resources. An initial well could be expanded to include a sidetrack, and the programme is expected to take up to 70 days.

Statoil is covering all well costs, up to a cap of US$25mln, and Jersey is covered for a further 10% of well costs via a separate arrangement with the other partner CIECO Exploration and Production.

Verbier marks culmination of several years’ work

Whilst the move to drilling has come quickly since Statoil took control of the project, via an August 2016 farm-in deal, nonetheless, Jersey chief operating officer Ron Lansdell said: “The drilling of the Verbier prospect is the culmination of several years of hard and creative work by the joint venture partnership.

“The P.2170 Licence was previously operated by Jersey Oil & Gas alongside CIECO, and we significantly de-risked the prospect prior to negotiating the farm-out to Statoil, the current operator.

“Success at Verbier could provide significant impetus for potential future exploration of the neighbouring Cortina prospect within the P.2170 Licence area."

Andrew Benitz, Jersey chief executive, meanwhile, added: “We are pleased to announce that drilling operations on the Verbier prospect have now commenced,” said Andrew Benitz,  Jersey chief executive.

“The Verbier prospect is estimated to have mean prospective resources of 162MMBOE and has the potential to add considerable value to our joint venture partnership."

It could be “game changer”

Oil and gas companies expert Malcolm Graham Wood, in his daily blog, reckons a success in the Verbier well would be a ‘game changer’ for Jersey Oil & Gas.

“The well is targeting mean prospective resources of 162m barrels of oil equivalent and is given a 29% COS by ERC in their CPR,” he said.

“Higher than the normal wildcat in the area this is probably due to the significance of the 20/5a-10Y well drilled by Talisman back in 2006.

“At the analyst’s presentation some months ago much was made of this deviated well, it wasn’t targeting these J64 sands but passed through them and tested oil and gas on the intersection.

“JOG clearly feel that that intersection to be within the south eastern flank of the Verbier prospect and thus the reasons for being so optimistic.”

He added: “Investors will be aware that there is potential downside if this well doesn’t come in but JOG has plenty more to offer, if however it should be successful then the shares will justify a significantly higher price, well above 500p in my estimation.”

View full JOG profile View Profile

Jersey Oil and Gas PLC Timeline

Related Articles

Carnarvon Petroleum's Adrian Cook discussed newsflow from North West Shelf at Proactive's CEO Sessio
September 15 2017
Adrian Cook discussed the company's portfolio strategy at Proactive's CEO Sessions.
onshore drilling operation
October 23 2017
The hotly anticipated Opuama-7 well appears to have been a success and the company is now advancing plans to drill more new wells at the Opuama field
oil and gas operations
January 04 2018
Phase 1 of the Otakikpo field is targeting 10,000 bopd of production, with Phase 2 due to raise the bar to 20,000 bopd.

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investor UK Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use