Shares in Jersey Oil and Gas PLC (AIM:JOG, OTC:JYOGF) jumped 17% in early deals after the company revealed it was close to inking a farm-out deal with a “well-funded industry heavyweight”.
There was no guide to the identity of JOG’s potential new partner in the Greater Buchan Area (GBA), offshore northern Scotland.
However, the press release from the junior oiler suggested an agreement was imminent.
"This [news] should be well received by investors who had started to lose faith as time progressed, and after a string of recent negative sector news and dashed hopes of a floor oil price being applied to the UK Energy Profits Levy in yesterday’s ‘Green Day’,” said finnCap analyst Jonathan Wright.
“Regardless of the oil industry’s backlash to the imposition of the UK windfall tax, the fact remains that for large North Sea producers, JOG’s GBA development offers a highly commercial project, the economics of which are supercharged by the major tax shelter the investment provides.”
In early trade, the shares were up 26p at 179p. finnCap's target price is 660p.