Jersey Oil and Gas PLC (AIM: JOG, OTC: JYOGF) has successfully finalized its farm-out deal with NEO Energy, which results in a 50% stake in the Greater Buchan Area (GBA) assets being transferred to its newly-acquired partner.
The company has also acknowledged receipt of the initial US$2 million payment for the transaction.
In future, Jersey stands to gain from a complete carry on approximately US$25 million worth of GBA expenditure, addressing its remaining 50% stake, as the project makes headway towards the likely approval of a field development plan (FDP).
Andrew Benitz, CEO, expressed his delight at the completion of the farm-out deal and the swift progress towards finalizing the GBA development solution. He said, “With the planning and financing secured for the Buchan Field Development Plan, our focus now shifts to adding more value by obtaining an additional GBA partner prior to FDP approval and maintaining a fully carried 20-25% stake in the development programme.”
There are specific milestone cash payments that will be activated as GBA advances – US$9.4 million will be due once the project’s development solution is agreed upon, followed by US$12.5 million upon the FDP’s approval by UK regulators, and US$5 million each if additional FDPs are approved for the J2 and Verbier discoveries.
