A flash blog today, I am travelling for a few days away….

Jersey Oil & Gas

Jersey Oil & Gas has announced its unaudited Interim Results for the six month period ended 30 June 2023.


§ Transaction with NEO Energy (“NEO”) completed for the farm-out of a 50% interest in the Greater Buchan Area (“GBA”) licences in exchange for certain cash payments, funding through to Field Development Plan (“FDP”) approval and a 12.5% development expenditure carry to first oil for the 50% interest retained by the Company

§ Redeployment of a Floating, Production, Storage and Offloading (“FPSO”) vessel selected as the preferred GBA development solution – negotiation of fully termed agreement for acquisition of a high-quality vessel advancing

§ Approval secured from the North Sea Transition Authority (“NSTA”) for the extension of the Second Term durations of the GBA licences, thereby providing the time required to prepare the necessary Field Development Plans (“FDP”)

§ Transfer of operatorship to NEO formally completed in July 2023, with the project team now mobilised for commencement of Front End Engineering and Design phase of activities

§ Preparation underway of the Environmental Statement for the Buchan field redevelopment programme that is planned for submission later this year – engagement ongoing with the statutory consultees

§ Key focus remains on creating additional value through securing a further GBA farm-out in order to ultimately provide the Company with a fully carried 20-25% interest in the Buchan redevelopment – engagement ongoing with potential counterparties

§ Cash position of approximately £5.6 million, with no debt, as at 30 June 2023.  Further cash receipts due on satisfying Buchan re-development milestones – $9.4 million on execution of the FPSO acquisition agreement and $12.5 million on Buchan FDP approval

Andrew Benitz, CEO of Jersey Oil & Gas, commented:

“The first half of the year has been a pivotal period in the history of the Company.  With the farm-out to NEO Energy completed, the GBA development solution locked down and the licences covering the area extended, we now have a clear pathway to monetising the resource base we have built up over recent years. 

We are encouraged by the collaborative progress being made by NEO and look forward to finalising the acquisition agreements for the FPSO, creating additional value through securing further farm-outs and moving onwards with the various workstreams required to get to Field Development Plan approval next year.”

It has indeed been a ‘pivotal period’ in the history of JOG, right now these figures being wholly irrelevant as the farm-out of 50% of the GBA to NEO is the most important part of the current process. With the FPSO concept being selected the key is now closing on the acquisition of the vessel. 

With the licence extension secured there are a number of key items in discussion ahead of the ket FDP approval next year. These include further farm-downs of say 25-30% which is ongoing and the two existing partners are, as I understand it, working well together in all operational matters.

CEO Andrew Benitz is understandably in very good form, the NEO deal is proving to be very good with an excellent carry and the project is making good progress with what is turning out to be a great partner. I think it should be remembered that JOG is now in a very strong position indeed, as I have said right from the start and reinforced when the farm-out was completed the upside for JOG is by a multiple, not just a %age gain, the value here is huge.