Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

Jersey Oil & Gas poised for exciting start to 2019 with new Verbier well

The second well at Verbier has the potential to significantly upgrade the size and commercial potential of the presently undeveloped oil field
oil and gas operations
Jersey has an 18% in the oil discovery

It is undoubtedly an important time for Jersey Oil & Gas PLC (LON:JOG) and its key asset, the Verbier discovery in the North Sea.

Discovered just over a year ago, Verbier has quickly become Jersey’s core asset.

Jersey will give an investor presentation in Dublin this month, to attend sign up here

In early 2019, new drilling is expected to take forward the asset.

Verbier is being led by Norway’s state-backed operator Equinor (formerly called Statoil) and Jersey holds 18%. It is located around 100 kilometres offshore, in relative proximity to pipeline infrastructure.

The 2017 exploration well unearthed a substantial oil resource, though presently the volumes are estimated in a broad range of 25mln to 130mln barrels - the gross oil value was estimated up to $1.75bn and a conservative ‘low case’ net estimate saw JOG’s stake worth around £31mln.

A new well slated to start in the coming weeks will aim to appraise the discovery, which if successful will lift and narrow the current resource estimates and valuations.

Practically, the well could set Verbier on a path to production.

Importantly for Jersey, valued in the market at about £40mln, the AIM-quoted firm’s share of exploration costs have been partially covered, thanks to a farm-out deal agreed with Statoil in summer 2016.

Jersey’s contribution to the appraisal programme has been estimated up to around £11mln, which could be recouped in multiples if the well proves successful. At the end of June, the company had £22.1mln of cash.

To put the proposition into context, Jersey’s ‘high case’ modelling in the event that the appraisal is successful would deliver nearly £200mln of potential value net to the company.

On paper, a potential field development would potentially begin in 2022, with peak daily output projected between 55,000 and 65,000 barrels of oil per day.

"Management remain very excited by the investment case and continue to believe that there is significant value potential for shareholders in the event of a successful outcome on the Verbier appraisal well programme and, importantly, in the additional opportunity set in this prolific part of the Central North Sea," chief executive Andrew Benitz said in September.

Jersey chief executive Andrew Benitz is due to meet investors and deliver a presentation at the Proactive Investors One2One Investor Forum on November 22 at The Spencer Hotel, IFSC, Dublin.

To attend, register your place at the event here

View full JOG profile View Profile

Jersey Oil and Gas PLC Timeline

Related Articles

oil well in Alberta
Thu
The company has cash-generating oil and gas operations with exploration upside.
oil and gas operations
August 02 2018
The agreement includes up to US$35mln in costs regarding the development of Aminex’s remaining 25% interest in the Ruvuma PSA, which would include the Ntorya project
oil and gas operations
April 09 2018
A 'high priority' exploration area is being advanced offshore Ireland, production growth is still on the cards onshore UK, and the company recently said it was looking at potential new opportunities.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use