Jersey Oil and Gas PLC (LON:JOG) shares have been on something of a roll in recent months and veteran sector commentator Malcolm Graham Wood reckons conditions in the North Sea market now are ripe for junior explorers to take advantage.
Shares have near trebled since the end of March when they were at 14.25p.
Currently, Jersey shares are at 37.75p.
The summer saw the group it strike a farmout deal with Norwegian major and North Sea expert Statoil over exploration licence P.2170 licence, so that drilling a well there can start next year.- a deal, which Graham Wood described as impressive.
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This is a promising prospect (P.2170), with the larger of the two targets, having 300mln barrel potential, the firm has said.
Wood said: "Statoil is without doubt the preferred partner in the North Sea....... the size they are and the fact they're able to produce long term profile assets and pick out areas, which are in inherently cheap works very well with a much smaller company like Jersey Oil & Gas."
He notes that majors like Shell and BG are generally moving away from the North Sea, apart from where there are particularly large prospects, meaning they are selling, providing opportunities for smaller firms.
Firms like Jersey are looking at developing such assets at much lower costs, says Wood, around US$20 a barrel opex costs, and with Brent crude staying a high US$40, it’s looking like a profitable model, he points out.