Andrew Benitz, CEO of Jersey Oil & Gas, commented: We are delighted to announce this transformational event. Prior to these awards, JOG’s net share of discovered resources in Verbier was estimated at 4.5 mmboe.
Today’s awards add an estimated 105 mmboe of discovered resources net to JOG, in addition to a material uplift in new prospective resources. This represents a highly significant value-enhancing milestone for our shareholders comprising 100% equity interests and operatorship of key development-ready assets with the potential to create a major new area hub within the Greater Buchan Area.
31st Supplementary Offshore (Buchan Area) Licensing Round Awards
Jersey Oil & Gas awarded significant acreage containing over
100 million barrels of discovered oil, including the Buchan oil field
Option Agreement with Equinor UK Limited (“Equinor”)
· JOG awarded, subject to documentation, 100% working interests and operatorship of three blocks in the Oil & Gas Authority’s (“OGA”) 31st Supplementary Offshore Licensing Round
· Acreage awarded includes the Buchan oil field and the J2 oil discovery
· Acreage is contiguous with JOG’s existing interest in Licence P2170 (Blocks 20/5b and 21/1d) that contains the Verbier discovery
· JOG’s acreage interest in the Greater Buchan Area (“GBA”), including P2170, is estimated to contain more than 100 million barrels of oil equivalent (“mmboe”) discovered mean recoverable resources plus in excess of 300 mmboe identified mean prospective resources
· Work will now commence on a Field Development Plan (“FDP”) with, subject to funding, first oil targeted for 2024 – JOG fully funded to submit the FDP
· Equinor and JOG have agreed on a 3-month option over a 50% equity interest in respect of Blocks 20/5d and 21/1a (the “Buchan Blocks”)
Andrew Benitz, CEO of Jersey Oil & Gas, commented:
“We are delighted to announce this transformational event. Prior to these awards, JOG’s net share of discovered resources in Verbier was estimated at 4.5 mmboe. Today’s awards add an estimated 105 mmboe of discovered resources net to JOG, in addition to a material uplift in new prospective resources. This represents a highly significant value-enhancing milestone for our shareholders comprising 100% equity interests and operatorship of key development-ready assets with the potential to create a major new area hub within the Greater Buchan Area.
These awards are the kind of value-creating opportunities available to nimble independent companies operating in the North Sea today and stem from an intensive two-year work effort behind the scenes by JOG to prepare today’s winning applications. By way of low-risk accumulation of discovered resource volumes, this is by far the most significant event for JOG since its inception and we are excited to start work on this new project immediately.
We are also pleased to enter into an option agreement with Equinor, which serves to demonstrate JOG’s efforts to successfully collaborate and continue to strengthen our working relationship with Equinor as Operator of Licence P2170.”
Jersey Oil & Gas (AIM: JOG), an independent upstream oil and gas company focused on the UK Continental Shelf (“UKCS”) region of the North Sea, is pleased to announce that it has been awarded, subject to documentation, 100% working interests and operatorship of three blocks in the OGA’s 31st Supplementary Offshore Licensing Round. This Greater Buchan Area (“GBA”) acreage awarded to JOG includes the Buchan oil field and the J2 (well 20/5a-10Y) oil discovery.
The acreage awarded is contiguous with JOG’s existing interest in Licence P2170 (Blocks 20/5b and 21/1d) which contains the 2017 Verbier (J62-J64) oil discovery with a low case operator estimate of approximately 25 mmboe of discovered resource in addition to significant identified prospective resources, in which JOG holds an 18% working interest alongside the operator, Equinor UK Limited (70%), and co-venturer CIECO V&C (UK) Limited (12%).
Together with its interest in the Verbier discovery, the new GBA acreage provides JOG with a significant opportunity to potentially establish and operate a future major new area development to access more than 100 mmboe of discovered mean resources (refer to table 1 below) plus in excess of 300 mmboe of identified mean prospective resources that are estimated to be present in the GBA.
Table 1: GBA blocks awarded to JOG with associated resource estimates
Unrisked Gross Recoverable Mean Resources (mmboe)
20/5d & 21/1a
Source: JOG Management’s estimates based on OGA information, data acquired by JOG from Repsol Sinopec Resources UK Ltd and independent work completed by Rockflow Resources Ltd on behalf of JOG.
The Company will now commence work to progress an FDP seeking, subject to funding, to deliver a potential JOG-operated major new area hub development in the medium term in line with the OGA’s Maximum Economic Recovery (“MER”) strategy. JOG is currently fully funded to compile and submit the requisite FDP. This proposed new area hub will be planned to incorporate the redevelopment of the Buchan oil field, together with the J2 oil discovery, with the potential to include the development of the Verbier discovery as well as other discovered and yet-to-be-found resources in the GBA. First oil, subject to funding, will be targeted for 2024. JOG will evaluate and determine the optimal sustainable development plan, designed to deliver future phased and extended plateau production.
The Buchan oil field was discovered by BP plc in the mid-1970s and came onstream in 1981. Production continued until May 2017, when the Buchan Alpha platform was no longer compliant with the current Safety Case, by which point a total of 148 million barrels (“MMbbls”) had been produced. Buchan oil is a light 33.5° API oil with low GOR (285 scf/bbl). JOG estimates that over 80 million barrels of recoverable oil volumes remain to be produced from the field.
JOG is also pleased to announce that Equinor and JOG have agreed and entered into a three-month option agreement under which Equinor has been granted an option over a 50% equity interest in respect of Blocks 20/5d and 21/1a (the “Buchan Blocks”), which contain the Buchan oil field and J2 oil discovery. Should the option be exercised, JOG shall act as Licence Operator in respect of the Buchan Blocks and Equinor will reimburse JOG for its 50% share of costs in relation to the licence applications.
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