Jersey Oil & Gas Plc (LON:JOG) is a stock to watch, according to oil expert Malcolm Graham Wood, who says the upcoming Verbier exploration well is exciting.
Specifically, he highlights that it is ‘educational’ that the Verbier prospect has been elevated quickly even among all the choices in the Statoil portfolio at this time when there are restrictions on capital spending.
Graham-Wood, in his daily blog note, said: “Now that the timetable is beginning to take shape and that Statoil are to pay for the first $25m of the well, visibility is well and truly clear, with 18% of this JOG are truly in the pound seats.
“I have had a number of questions about liquidity and JOG’s small market cap and whilst I understand the risks involved I am coming round to thinking that it is a risk worth taking.”
Earlier on Monday it was confirmed that Statoil had committed to the UK authorities that it will drilling an exploration well, in partnership with Jersey, in 2017.
Jersey in a statement said that Statoil, as operator, formally communicated to the Oil and Gas Authority that a firm well is committed on the P.2170 Licence in the summer season of 2017.
As a result of the formal confirmation an extension of the ‘drill-or-drop’ phase of the licence is not required, Jersey added.
The AIM quoted company’s 18% interest in the exploration programme is ‘carried’ by Statoil due to a joint venture agreement signed earlier this year.
Andrew Benitz, Jersey Oil and Gas chief executive, said: “We are delighted to confirm the company's participation in a well to be drilled on the highly material and prospective Verbier prospect in which Jersey Oil & Gas holds an 18% interest.
“We believe the planned well could be one of the most exciting exploration prospects to be drilled in the UKCS in recent years."