REG - Jersey Oil & Gas PLC - Corporate Update

Jersey Oil and GasAnnouncement

03/03/2025 07:15

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RNS Number : 9815Y  Jersey Oil and Gas PLC  03 March 2025

3 March 2025

 

Jersey Oil and Gas plc

("Jersey Oil & Gas", "JOG" or the "Company")

 

Corporate Update

 

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
provide a corporate update.

 

Highlights & Outlook

§ The Company commenced the year with a focus on two key activities:
advancing the Buchan Horst ("Buchan") development project to sanction and
Field Development Plan ("FDP") approval; and the pursuit of UK producing asset
acquisitions that accelerate monetisation of the Company's sizeable existing
tax allowances.

§ The Company and its Buchan project partners continue to await clarity on
the fiscal and regulatory uncertainties currently facing the UK's oil and gas
industry, with work on the Buchan project having been slowed down by the
Operator, NEO Energy, as previously noted.

§ Following an application submitted to the North Sea Transition Authority
("NSTA") in 2024, the Second Term of the P2498 Buchan licence has now been
extended by 24 months to 28 February 2027. This extension was requested in
order to provide the licensees with the time required to finalise a FDP for
the Buchan field.

§ Completion of the Buchan Environmental Impact Assessment ("EIA") approval
process by the Offshore Petroleum Regulator for the Environment and
Decommissioning ("OPRED") has naturally been paused following the Supreme
Court's "Finch" judgment in 2024 concerning the inclusion of Scope 3 emissions
in development project EIAs.  The actions required to advance the Buchan EIA
will be clarified once revised guidance is issued by OPRED, which is expected
in spring 2025.

§ The UK Government announced last year that a consultation will be held on
the tax regime that will apply to the oil and gas industry after 2030.
Satisfactory clarity on the results of this consultation is required to
facilitate sanctioning of the Buchan project.  It is anticipated that the
fiscal consultation will be launched shortly.

§ While the majority of the required inspection, verification and
pre-transfer work has been completed by Dana Petroleum on the Western Isles
floating production, storage and offloading ("FPSO") vessel to satisfy the
main technical requirements of the sale and purchase agreement, the agreement
longstop date was reached at the end of February 2025 with work outstanding.
In light of the current slowdown in Buchan project activities as a consequence
of the fiscal and regulatory consultations, along with work on the vessel
still requiring completion, the parties have not terminated the agreement and
are in dialogue on the optimal contractual way forward to accommodate these
delays.  NEO Energy, the Buchan operator, remains a 23% owner of the vessel.

§ In order to both accelerate potential value creation from JOG's existing UK
tax allowances of over $100 million and bring cash flow into the business, a
number of potential UK producing asset acquisitions are being actively
evaluated.

§ The total cash running cost of the business has been reduced by
approximately 50% to £1.5 million in 2025 as a result of actions taken by the
Company following the slowdown in activities on the Buchan project.  Per the
terms of the farm-out agreements executed with NEO Energy and Serica Energy,
the Company's 20% share of Buchan project expenditure is fully carried by our
two joint venture partners.

§ The Company's aggregate cash balance at the end of 2024 was approximately
£12.3 million.  A further $20 million cash payment is payable under the
terms of the Buchan farm-out agreements following approval of the FDP by the
NSTA and receipt of the associated regulatory and legal consents.

 

Andrew Benitz, CEO of Jersey Oil & Gas, commented:

"With the Buchan licence having now been extended, the joint venture
partnership has secured the necessary time to determine the appropriate path
to project sanction, with JOG holding a 20% carried interest to first oil.
Whilst the UK Government's fiscal and regulatory consultations are creating a
somewhat uncertain backdrop for the industry at the current time, the way
forward on these two key areas is scheduled to be resolved over the coming
months."

 

"The Buchan project has the potential to create over 1,000 jobs across many
parts of the UK's supply chain and over 200 project related jobs, attract
private investment of around £1 billion into the UK economy and generate
hundreds of millions in UK tax revenues."

 

 

Enquiries:

 Jersey Oil and Gas plc             Andrew Benitz        c/o Camarco:

                                                         020 3757 4980

 Strand Hanson Limited              James Harris         Tel: 020 7409 3494

                                    Matthew Chandler

                                    James Bellman

 Zeus Capital Limited               Simon Johnson        Tel: 020 3829 5000

 Cavendish Capital Markets Limited  Neil McDonald        Tel: 020 7220 0500

 Camarco                            Billy Clegg          Tel: 020 3757 4980

                                    Rebecca Waterworth

 

- Ends -

 

Notes to Editors:

Jersey Oil & Gas (AIM:JOG) is a UK energy company focused on creating
shareholder value through the development of oil and gas assets and the
execution of accretive transactions.

 

The Company has a focused asset portfolio centred on developing homegrown
North Sea resources that support the UK's energy requirements as it
transitions towards net zero.  JOG holds a 20% interest in each of licences
P2498 (Blocks 20/5a, 20/5e and 21/1a) and P2170 (Blocks 20/5b and 21/1d)
located in the UK Central North Sea and referred to as the "Greater Buchan
Area" ("GBA").  Licence P2498 contains the Buchan Horst ("Buchan") oil field
and J2 oil discovery and licence P2170 contains the Verbier oil discovery.

 

JOG's strategy is focused on unlocking the organic value of its GBA assets,
combined with the pursuit of potential asset acquisitions that bring cash
flow, diversity and quality investment opportunities into the portfolio.  The
Company's Board and Executive team have a wealth of experience in managing and
growing publicly listed energy companies and a strong track-record of value
creation in the UK North Sea's oil and gas sector.

 

Forward-Looking Statements

This announcement may contain certain forward-looking statements that are
subject to the usual risk factors and uncertainties associated with an oil and
gas business.  Whilst the Company believes the expectations reflected herein
to be reasonable in light of the information available to it at this time, the
actual outcome may be materially different owing to factors beyond the
Company's control or otherwise within the Company's control but where, for
example, the Company decides on a change of plan or strategy.

 

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 as it forms part of United Kingdom domestic law by virtue of
the European Union (Withdrawal) Act 2018, as amended by virtue of the Market
Abuse (Amendment) (EU Exit) Regulations 2019.

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