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 its audited results for the year ended 31 December 2018.
Highlights
- Post discovery well analysis: 2018 was a year of post well analysis following the Verbier oil discovery made in October 2017.
- PGS Seismic Survey: JOG participated in pre-funding a 3D seismic survey over the P2170 licence area and certain offset acreage to advance the interpretation of the 2017 Verbier discovery and assessment of other exploration opportunities within the P2170 licence and surrounding area.
- Preparation for the Verbier Appraisal Well: The West Phoenix semi-submersible rig was contracted for drilling, as part of a larger Equinor operated drilling campaign, leading to cost benefits for JOG with certain costs being shared. Originally scheduled to commence in H2 2018, the well was subsequently rescheduled and drilled in H1 2019.
- Board Change: On 14 November 2018, Vicary Gibbs joined the Company and Board, replacing Scott Richardson Brown as Chief Financial Officer.
- Strong Cash Position: Ended 2018 with £19.8 million of which approximately £4-5 million will be utilised through H1 2019, principally to settle our share of the Verbier appraisal well costs.
Post year end
- Verbier Appraisal Well Result: The 20/05b-14 appraisal well, which was safely drilled, ahead of schedule and within budget, unfortunately did not encounter Upper Jurassic reservoir sands as anticipated. The appraisal well results will be fully integrated with the final processed data from the 3D seismic survey, acquired in 2018, in order to evaluate the upside potential for further Verbier appraisal activity.
– Our contingent resource volumetric estimates are likely to be revised towards the lower end of the initial resource estimate of 25 million barrels of oil equivalent (“MMboe”) from the 2017 Verbier oil discovery results, a volume which JOG views to be commercially viable.
– A large part of the mapped area of the Verbier discovery, located to the north west of the 20/05b-14 well location remains untested. Additional resource potential, which was not tested with this well or the discovery well, has also been identified in a deeper horizon beneath the Verbier discovery. These prospects, along with the Cortina prospect, will be re-evaluated with the new seismic data and then considered for future drilling.
Outlook
- Delivery of final 3D seismic survey dataset: Final processed dataset from the 3D seismic survey is expected to be delivered around the end of Q2 2019.
- Technical re-evaluation of P2170 licence area: JOG, together with Equinor and CIECO, will complete the already planned full re-evaluation of the licence area, combining the recent appraisal well results and data collected during operations with the fully processed 3D seismic data in order to better understand the reservoir distribution of the primary target. The evaluation will also include an assessment of additional prospectivity in deeper targets and the other previously identified exploration opportunities, including Cortina, before making decisions on any potential future appraisal/exploration programme.
- Licensing awards in the 31st Supplementary Offshore Licensing Round: We look forward to the results of the 31stSupplementary Offshore Licensing Round which we see as being highly beneficial to the Verbier discovery, with the potential to enhance its commercial viability.
- M&A: The UKCS continues to benefit from a vibrant M&A market. JOG continues to evaluate all relevant opportunities as it pursues its growth strategy seeking attractive returns.
Andrew Benitz, CEO of Jersey Oil & Gas, commented:
“JOG continues to benefit from our initial Verbier oil discovery announced in 2017, notwithstanding the recent appraisal well results. We look forward to delivery of the new 3D seismic data and working with our co-venturers on assessing potential future appraisal and exploration drilling opportunities on the licence area. Additionally, we are excited by the potential for a new area hub catalysed by the 31st Supplementary Offshore Licensing Round and the positive impact we believe this will have for Verbier.
“The Company benefits from a strong funding position and we are optimistic that we can create value for shareholders through our core asset base, with multiple catalysts that exist for the Company through the remainder of 2019.”
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