Jersey Oil & Gas Plc (LON:JOG) is raising up to £24mln to fund an appraisal programme at the new Verbier project as well as new exploration drilling at the follow-on Cortina prospect.
The company has an 18% stake in the UK Seaward Licence P2170 in the North Sea where Statoil is the operator.
READ: Jersey Oil and Gas soars after Statoil discovery, but WH Ireland still sees the share going much higher
Statoil estimates the new Verbier discovery between 25 and 130mln barrels, with at least 25mln barrels seen as recoverable in the immediate vicinity of the discovery well.
At Verbie, the exploration well’s initial target was unsuccessful but Statoil decided to drill out a side-track targeting a separate up-dip prospect, and the gamble proved successful as it found a hydrocarbon accumulation in good quality sands.
Given that the average North Sea discovery is typically in the order of 20mln barrels, the initial discovery at Verbier represents an opportunity to make a significant project.
Jersey said in a statement that it believes Statoil will suggest further appraisal and exploration drilling in order to better define the prospectivity and commerciality of three key prospects - namely Verbier, Cortina and Meribel.
The AIM-quoted explorer’s own view anticipates the appraisal and exploration programmes taking place through 2018, prior to development with Verbier potentially reaching ‘first oil’ by around 2022.
Chief executive Andrew Benitz said in the statement that: "Jersey Oil & Gas is in a unique position with an 18 per cent interest in Licence P.2170 containing the Verbier oil discovery which Statoil, the operator, initially estimates has gross recoverable resources of between 25 and 130MMboe, with a minimum proven recoverable volume in the immediate vicinity of the wellbore of 25 MMboe.
“Evaluation of the well results alongside the existing 3D seismic data is ongoing and today's placing ensures that we are able to fund our working interest in this highly attractive licence once the appraisal drilling programme is confirmed by the operator.”
He added: “Alongside this we have a strong pipeline of asset opportunities and are encouraged by the active deal flow in the North Sea.
“The additional funds will allow us to maintain our balance sheet strength as we continue to pursue a production-led acquisition strategy within the UKCS."
Jersey proposes to raise £20mln through a share placing that will be arranged by brokers Arden and BMO, and separately qualifying shareholders will be given the opportunity to subscribed for new shares via an offer.
The equity funding effort is not being underwritten. Details such as price and the size of the equity issue will be determined through the bookbuild process, which is due to be wrapped up no later than 5:30pm today.