Jersey Oil & Gas (AIM: JOG), an independent upstream oil and gas company focused on the UK Continental Shelf region of the North Sea, is pleased to provide an update on the status of the GBA farm-out process.
The Company is in advanced exclusive negotiations with a significant UK North Sea operator. Heads of terms have been agreed for the farm-out of a material interest in the GBA licences to this company and both parties are working towards finalising a fully termed agreement in the near future. An exclusivity period until 30th April 2023 has been agreed.
Despite recent negative sector news and dashed hopes of a floor oil price being applied to the UK Energy Profits Levy, a press release from the junior oiler suggested that an agreement was imminent. As a result, analyst Jonathan Wright from finnCap believes that investors will respond positively to this news.
Wright also noted that regardless of the oil industry’s criticism of the imposition of the UK windfall tax, JOG’s GBA development provides a highly commercial project for large North Sea producers. The investment provides a major tax shelter that supercharges the project’s economics.
Andrew Benitz, CEO of Jersey Oil & Gas, commented :
“We are pleased to be in advanced exclusive negotiations with a well-funded industry heavyweight and whilst there can be no guarantees of a successful conclusion, we are aiming to finalise the farm-out in the near future and look forward to updating shareholders shortly.”
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