Jersey Oil & Gas Plc’s (LON:JOG) Verbier discovery is a “big company asset”, according to stockbroker WH Ireland, which has issued a note after operator Statoil hired a rig for a new well.
While the North Sea find may be a ‘big company asset’, analyst Brendan Long also highlighted that via its 18% stake Jersey offers investors the significant kind of upside often associated with ‘small companies’.
Verbier was discovered quite recently, with a well in the second half of 2017, and Statoil is making rapid progress with an appraisal well now due this summer.
“We believe the pace being set by Statoil clearly indicates that Verbier is a high-priority within that company’s global suite of assets,” Long said.
Based on the discovery well data Verbier has so far been estimated to host between 25mln to 135mln barrels oil equivalent (boe), with the mean set at 69mln boe.
The plan is for the appraisal drilling to help determine a narrower range of resources.
“The high-low range of uncertainty is quite large for a discovered oil field benefiting from 3D-seismic and a successful well penetration. This reflects the partly stratigraphic nature of the field,” Long said.
“We believe that the first appraisal well will be drilled to the north of the discovery well (sidetrack well 20/05b-13z) and that if successful it would increase the bottom of the high-low range by bringing it closer to the mid-case estimate.”
He added: “A decision to drill a sidetrack well in 2018 will be made after the results of the first appraisal well are known while the rig is still on location (essentially a second appraisal well).
“This would likely be to test the full upside potential of the reservoir. No precise well locations have been disclosed.”