Farm-out of Interest in Seaward Production Licence
5 January 2016
Jersey Oil and Gas plc
("Jersey Oil & Gas" or the "Company")
Farm-out of Interest in Seaward Production Licence P. 1989 Blocks 14/11, 12 & 16
Jersey Oil & Gas (AIM: JOG), an independent upstream oil and gas company focused on the UK Continental Shelf region of the North Sea ("UKNS"), is pleased to announce that it has signed a sales and purchase agreement (the "SPA") with Azinor Catalyst Limited ("Catalyst") for the farm-out of its 50 per cent. interest in Seaward Production Licence P.1989 Blocks 14/11, 12 & 16 (the "Licence") held via its wholly owned subsidiary Trap Oil Limited ("Trap"). The balancing 50 per cent. interest in the Licence is currently held by Norwegian Energy Company UK Limited ("Noreco").
The Licence area located in the North West Witch Ground Graben in the Moray Firth, was awarded as a Traditional licence in the Department of Energy and Climate Change's ("DECC") 27th Licensing Round and prospectivity has been identified in Early Cretaceous sediments. Under the terms of the SPA, Catalyst has agreed to acquire 100 per cent. of the Licence from both Trap and Noreco, and on completion of the transaction will be appointed as Operator. The SPA is subject to approval by DECC. By way of consideration, Catalyst will undertake to:
· carry out certain firm work commitments (the "Firm Commitments Work Programme"), as set out in the terms of the Licence, including the drill-or-drop obligation in respect of an exploration well; and
· make certain payments to each of Noreco and Trap contingent on the occurrence of certain future events, namely:
o US$2m within 90 days of the date when an exploration well, drilled within the Licence area, exceeds a threshold of net-pay with a vertical extent of no less than twenty metres of sands with a hydrocarbon saturation above sixty per cent. and a permeability cut-off of 1mD; and
o a further US$2m within 90 days of the date when a Field Development Plan in respect of the aforementioned exploration well is approved by the Secretary of State for Energy and Climate Change.
Andrew Benitz, CEO of Jersey Oil & Gas, commented:
"We are pleased to announce this farm-out to Catalyst. In line with our stated strategy, Jersey Oil & Gas is actively managing and de-risking its existing exploration portfolio and this transaction ensures that the Company maintains exposure to the potential upside from this Licence, at no further cost to the Company."
Enquiries:
|
Jersey Oil & Gas plc
|
Andrew Benitz, CEO |
C/o Camarco: Tel: 020 3757 4983 |
|
Strand Hanson Limited |
James Harris Matthew Chandler |
Tel: 020 7409 3494 |
|
FirstEnergy Capital LLP |
Hugh Sanderson David van Erp |
Tel: 020 7448 0200
|
|
Camarco |
Billy Clegg Georgia Mann Zoe Moulton |
Tel: 020 3757 4983 |
Notes to editors:
The Group's strategy is focused on maintaining, developing and exploiting a portfolio of North Sea assets with a greater focus on producing assets in order to seek to unlock the inherent value in the Group's existing tax losses. The Group is currently seeking to acquire potential further North Sea oil and/or gas producing assets, some of which have already been identified and are currently undergoing due diligence and subject to ongoing commercial negotiations. Any potential acquisitions that are taken forward are intended to be financed from one or more of the Group's balance sheet, the proceeds from strategic sales of selected parts of the Group's existing asset portfolio and further equity and debt capital raises.
The Group's target acquisition profile includes mature oil and/or gas production assets with long tail-end production profiles and upside potential, from principally satellite fields with production-based tariff agreements, limited exposure to host platform costs, low operating costs and manageable decommissioning liabilities.
This information is provided by RNS
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