Jersey Oil & Gas (JOG) has accomplished the acquisition of a further 70 per cent working curiosity in Licence P2170 (Blocks 20/5b and 21/1d) situated within the UK North Sea from Norway’s Equinor.
JOG, now the operator of the license and an 88 per cent stakeholder, mentioned on Wednesday that the consideration for the acquisition would encompass two milestone funds and a royalty primarily based on potential future oil volumes produced from the Verbier Upper Jurassic (J62-J64) reservoir oil discovery.
Namely, JOG can pay $three
million upon the UK’s Oil & Gas Authority sanction of the sector growth
plan for the Verbier and one other $5 million upon first oil.
Royalty phrases embrace a gross
income royalty on the oil manufacturing generated from the Verbier Field
calculated on a 70 per cent working curiosity for on-block volumes on the
following ranges: 5 per cent for the primary 12 million barrels of oil produced
and bought; four per cent for the next 13 million barrels of oil produced and
bought; and a pair of per cent for the subsequent 10 million barrels of oil produced and bought.
According to the corporate,
this acquisition, which isn’t topic to upfront money funds, gives JOG
with a possibility to create vital worth by doubtlessly growing
the Verbier discovery as a part of the Greater Buchan Area (GBA) hub.
Licence P2170 additionally advantages
from a number of materials exploration prospects which have high-value potential
by tie-backs to the proposed new GBA hub.
Andrew Benitz, CEO of JOG, mentioned: “I’m happy that JOG has accomplished this vital step to amass a further curiosity and operatorship within the Verbier discovery along with materials exploration upside to facilitate our plan to develop Verbier as a part of our GBA growth.
“We proceed to make stable progress on idea choose for the GBA and work carefully with contractors, different space stakeholders and the OGA on this vital undertaking“.
It is value reminding that the 2 firms entered right into a conditional sale and buy settlement for the 70 per cent stake again in January.
Another noteworthy truth is that Equinor and JOG drilled a dry and “disappointing” Verbier appraisal effectively in April 2019. As a consequence, Verbier’s useful resource estimates needed to be downgraded.
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