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Jersey Oil & Gas reports 'great progress' as North Sea farm-out advances
Published Sep 22, 2022 08:47
Updated Sep 22, 2022 09:41
© Reuters Jersey Oil & Gas reports 'great progress' as North Sea farm-out advances
Jersey Oil and Gas PLC chief executive Andrew Benitz highlighted “great progress” as the North Sea junior reported its interim results for the six months ended 30 June 2022.
Interest in the Greater Buchan Area (GBA) field development was further bolstered in recent months amid favourable fiscal and macroeconomic developments, the company highlighted.
Or, to put it more plainly, the project benefits from higher oil and gas prices and a reprioritising of domestic hydrocarbons at government level, including new tax reliefs, all of which have strengthened Jersey’s position since the farm-out was launched in March.
The company, which ended the period with £8.7mln of cash, noted that its farm-out process to bring a funding partner into GBA is advancing as planned and it is continuing active engagements with multiple counterparties.
Substantial progress has been made, it added, with the majority of interested parties expected to complete technical due diligence in October.
In the meantime, Jersey described the commercial discussions as “constructive”.
“Interest is strong, technical studies across the various development solutions are well advanced and commercial discussions are ongoing with serious, well-funded counterparties,” Benitz said in a statement.
“Since launching the process, the company's engagement strategy has been broadened to advance a range of competing development solutions, thereby providing increased optionality."
GBA comprises multiple fields and discoveries which together host an estimated 408mln barrels oil equivalent, plus as a ‘hub’ project it offers the potential to expand through multiple additional high-margin exploration opportunities identified by Jersey in adjacent areas.
The pre-development project has been materially de-risked by Jersey.
A phased development concept (with five production wells in the first) anticipates a 30-year plus field lifespan, with capex estimated at £1bn including contingencies, and targets a plateau rate of around 40,000 barrels of oil and 15mln cubic feet of gas per day. At peak rates, it is anticipated that the operating cost per barrel would be around US$8 to US$9 per barrel.
GBA is located in a fairly active section of the North Sea with the likes of BP (LON:BP), CNOOC, Repsol (BME:REP), INEOS, Harbour Energy, Total operating in the surrounding area.
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