The Company is also pleased to report that the GBA partners are well advanced with selection of the Buchan re-development solution and it expects to be able to provide an update on this shortly
Jersey Oil & Gas completes Greater Buchan Area farm-out with NEO Energy. (Credit: D Thory from Pixabay)
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 announce that it has completed the farm-out transaction with NEO Energy (“NEO”). The companies each now hold a 50% interest in the licences that comprise the Greater Buchan Area (“GBA”), being P2498 (“Buchan”) and P2170 (“Verbier”), with NEO set to become the operator as part of the transaction.
The Company is also pleased to report that the GBA partners are well advanced with selection of the Buchan re-development solution and it expects to be able to provide an update on this shortly.
Farm-Out Transaction Summary
As previously announced, in exchange for entering into the agreements to divest a 50% working interest and operatorship in the GBA licences to NEO, the Company will receive:
§ $2 million cash payment on completion of the transaction – now received
§ a full carry for JOG’s 50% share of the estimated $25 million cost to take the Buchan field through to Field Development Plan (“FDP”) approval
§ $9.4 million cash payment upon finalisation of the GBA development solution
§ $12.5 million cash payment on approval of the Buchan FDP by the North Sea Transition Authority (“NSTA”)
§ a 12.5% carry of the Buchan field development costs included in the FDP approved by the NSTA; equivalent to a 1.25 carry ratio
§ $5 million cash payment on each FDP approval by the NSTA in respect of the J2 and Verbier oil discoveries
Andrew Benitz, CEO of Jersey Oil & Gas, commented: “We are delighted to have completed the farm-out transaction and to be swiftly moving forwards with finalisation of the GBA development solution. With the route and the funding secured for preparation of the Buchan Field Development Plan, our attention now turns to unlocking further value by securing an additional GBA partner ahead of FDP approval and retaining a fully carried 20-25% interest in the development programme.”
Source: Company Press Release