UK-based Jersey Oil & Gas (JOG) has completed a farm transaction with NEO Energy, both companies now holding a 50 percent interest in licenses for assets P2498 and P2170 in the North Sea, it said JOG in a news. liberation
Licenses P2498 and P2170 are also known as the Buchan and Verbier assets respectively and are part of the Greater Buchan Area (GBA) development project in Jersey. As part of the transaction, NEO will be the operator of the assets.
JOG confirmed receiving a cash payment of $2 million to complete the transaction and will also receive full transportation for its 50 percent share of the estimated $25 million cost to bring the field from Buchan to the approval of the field development plan (FDP), as reported. the release to the media. Full freight is the cost of interest, storage and insurance for a commodity held over time.
JOG will also receive a cash payment of $9.4 million upon completion of the GBA development settlement, a cash payment of $12.5 million upon approval of the Buchan FDP by the Transition Authority of the North Sea (NSTA) and a 12.5 per cent burden on the development costs of the Buchan field included. in the FDP.
As part of the transaction, JOG will also receive a $5 million cash payment for each NSTA FDP approval related to the J2 and Verbier oil discoveries.
“We are pleased to have completed the farm transaction and to move forward quickly with the completion of the GBA development solution,” said Andrew Benitz, CEO of JOG. “With the route and funding secured for the preparation of the Buchan Field Development Plan, our focus is now on unlocking further value by securing an additional GBA partner prior to FDP approval and retaining a total interest of 20-25% in the development program.”
Earlier in June, the NSTA had approved JOG’s application to extend the second term of its Buchan license by 18 months to February 2025 and also the transfer of a 50 percent stake in the project to NEO.
According to a previous statement, JOG and NEO will work together to select a final development solution for the GBA licenses and will target 2026 for first production. Once the preferred development solution is selected, the GBA project will move into front-end engineering and design activities, along with the preparation of the required FDP for submission to the NSTA, targeted for approval during the first semester of 2024, JOG said.
“The GBA spin-off process involved extensive interactions with multiple counterparties throughout the year, culminating in the transaction announced in April of this year with NEO Energy. The GBA is a re-development of high quality, which is on track to generate significant value for the company and its shareholders.With the route for the execution of the development program now firmly established, the company looks forward to unlocking the many value catalysts that mark the process to project approval and beyond,” Benitz said in an earlier statement.
Regarding the company’s strategy, JOG said that holding additional GBA shares was at the forefront of its business development plans, ultimately retaining a 20 to 25 percent stake in the development . “Building a full-cycle upstream business focused on the UKCS remains JOG’s ultimate goal and, having now announced a major exit in terms of GBA development, we will also look to advance our strategy acquisition. We believe the North Sea can be the crucible for the energy transition and that oil and gas companies can lead investment in new energy. We see JOG as no different to our larger peers, so in more corporate and asset opportunities at the height, we are also actively seeking new energy investment opportunities,” said JOG.
JOG reported a loss of $3.94 million (GBP 3.1 million) for 2022. The company’s cash position was approximately $8.34 million (GBP 6.6 million) , which he said was well within his forecast.
According to the company’s website, NEO was founded in July 2019 as an independent full-cycle energy business on the UK continental shelf. The company is backed by HitecVision, a leading private equity investor focused on Europe’s offshore energy industry.
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