Significant uplift in Buchan contingent resources
26January 2021
Jersey Oil and Gas plc
("Jersey Oil & Gas", "JOG" or the "Company")
Significant uplift in Buchan oil field contingent resource estimates
Contingent resource estimates at Buchan increased to 126 MMstb
and GBA core to 162 MMstb
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 a significant increase in 2C contingent resource estimate for the Buchan oil field, within the Greater Buchan Area ("GBA").
Dynamic reservoir modelling of the P50 stock tank oil initially in place ("STOIIP") case has recently been completed by Schlumberger Oilfield UK Plc ("Schlumberger"), using their proprietary INTERSECT* high resolution reservoir simulator. Such new and comprehensive dynamic models provide a robust forecast for the P50 case for the Buchan oil field, having fully incorporated all available subsurface information and successfully history matched 36 years of production data. This project workstream has now been independently peer reviewed as part of a wider scope reviewing the development concept by Vysus Group (formerly Lloyds Register's Energy Business), a global engineering and technical consultancy.
* Mark of Schlumberger
Subsurface Highlights :
- Dynamic reservoir modelling has determined that the P50 estimate of the technically recoverable resources for the Buchan oil field is 126 million stock tank barrels ("MMstb"), representing an increase of over 50% on previous estimates derived from decline curve analysis
o The new dynamic model used inputs from the high resolution 2018 PGS 3D seismic survey data, together with the static and dynamic well data and field production history
o The Buchan sandstone reservoir is a well-connected, dual porosity and permeability system
o Buchan oil quality is light sweet crude at 33.5° API
o The expected ultimate recovery factor is 54% of original oil in place, with historic field production having recovered 29% of the P50 STOIIP estimate
o Planned future production will be achieved using optimally located deviated wells placed high in the structure with water injection
Buchan oil field estimates :
|
Buchan Contingent Resource Estimates |
|||
|
|
P90 |
P50 |
P10 |
|
STOIIP (MMstb) |
426 |
507 |
615 |
|
Remaining Technically Recoverable Resource Volumes (MMstb) |
72 |
126 |
184 |
|
Historic Production (MMstb) |
148 |
148 |
148 |
|
Total Recovery Factor |
52% |
54% |
54% |
|
Development Plan - Well Count |
4 Producers 2 Water Injectors |
5 Producers 2 Water Injectors |
8 Producers 4 Water Injectors |
GBA development project update :
- As a result of this increase, the GBA core volume, including the Buchan oil field and volumes from the J2 and Verbier oil discoveries, is now forecast to have 2C contingent resources of 162 MMstb or 172 million barrels of oil equivalent ("MMboe") including associated gas
- Preliminary economics for the GBA core development, which includes Buchan, J2 and Verbier are very encouraging - higher volumes serve to reduce unit costs and drive economic efficiencies
- Having selected our preferred development concept for the GBA hub development, management is now finalising the Concept Select report and economics for submission to the OGA ("Oil and Gas Authority") with the aim of commencing FEED in Q3 2021
- The Company continues to advance its technical and economic evaluation work in respect of electrifying the GBA in order to make it a low carbon emissions project
- Today's increase in volumes comes ahead of the anticipated launch of the Company's GBA farm-out process later this quarter seeking to attract industry partnership to join JOG in unlocking the significant value that exists within this very exciting major North Sea area hub development project
The updated Buchan subsurface evaluation presentation is available to download on the Company's website at: www.jerseyoilandgas.com/investors/presentations/
Andrew Benitz, CEO of JOG, commented :
"I am delighted with the results of dynamic modelling which result in an increase in the estimated contingent resource volumes of light sweet crude in the proven, conventional reservoir at Buchan by over 50%. These compelling results demonstrate the substantial inherent value of the Buchan field and the wider GBA development.
"We recognised the potential of Buchan at an early stage and have maintained our strategic focus on this area in the heart of the Central North Sea with the benefit of aggregation of high value assets becoming self-evident. The GBA development project presents a very compelling investment case that we believe will have wide industry appeal. We look forward to formally engaging with industry in due course and attracting the right industry partnership aligned and committed to the GBA's future success."
Qualified Person's Statement
The information contained in this announcement has been reviewed and approved by Ronald Lansdell, Chief Operating Officer of Jersey Oil & Gas, a qualified Geologist and Fellow of the Geological Society, who has over 40 years' relevant experience within the sector.
Enquiries :
|
Jersey Oil and Gas plc
|
Andrew Benitz, CEO |
C/o Camarco: Tel: 020 3757 4983 |
|
Strand Hanson Limited |
James Harris Matthew Chandler James Bellman |
Tel: 020 7409 3494 |
|
Arden Partners plc |
Paul Shackleton Benjamin Cryer |
Tel: 020 7614 5900 |
|
BMO Capital Markets Limited |
Jeremy Low Tom Rider |
Tel: 020 7236 1010 |
|
Camarco |
Billy Clegg James Crothers |
Tel: 020 3757 4983 |
Notes to Editors :
Jersey Oil & Gas is a UK E&P company focused on building an upstream oil and gas business in the North Sea. The Company holds a significant acreage position within the Central North Sea referred to as the Greater Buchan Area ("GBA"), which includes operatorship and 100% working interests in blocks that contain the Buchan oil field and J2 and Glenn oil discoveries and an 100% working interest in the P2170 Licence Blocks 20/5b & 21/1d (subject to OGA approval of the acquisition of CIECO V&C UK Limited as announced on 26 November 2020), that contain the Verbier oil discovery and other exploration prospects.
JOG's total GBA acreage is estimated by management to contain more than 180 million barrels of oil equivalent ("mmboe") of discovered P50 recoverable resources net to JOG, in addition to significant exploration upside potential of more than 220 mmboe of prospective resources in close proximity to our planned Buchan platform. JOG is currently progressing the Concept Select phase of an FDP for the Greater Buchan Area.
JOG is focused on delivering shareholder value and growth through creative deal-making, operational success and licensing rounds. Its management is convinced that opportunity exists within the UK North Sea to deliver on this strategy and the Company has a solid track-record of tangible success.
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014.
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