Jersey Oil & Gas Plc (LON:JOG) has told investors that partner Statoil has now started drilling the Verbier exploration well in the North Sea.
The AIM-quoted 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.
"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."
Ron Lansdell, Jersey chief operating officer, added: “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."