Jersey Oil and Gas PLC (LON:JOG) is taking full ownership of Licence P2170, which hosts most of the Verbier discovery and is one part of the Greater Buchan Area (GBA) development project.
The company said the deal simplifies licence ownership ahead of the planned GBA farm-out process.
It sees Jersey acquire partner CIECO V&C (UK), a joint venture between Japanese firms ITOCHU Corporation and JOGMEC (Japan Oil, Gas and Metals National Corporation). The 12% stake in Licence P2170 is CIECO’s sole asset.
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Consideration for the transaction comprises £150,000 in cash plus up to a total of £2.5mln in contingent future payments – £1.5mln when a field development plan is approved by the UK’s Oil & Gas Authority and £1mln upon the first anniversary of ‘first oil’.
Jersey noted that the deal increases its ownership of multiple high-impact exploration opportunities including three drill-ready prospects – Verbier Deep, Wengen and Cortina
Jersey chief executive Andrew Benitz pointed out that the transaction positions the company perfectly before the completion of project concept selection and the planned launch of it’s wider GBA sales process.
“This acquisition increases JOG’s discovered resources, adds material value and exploration upside in addition to useful tax losses,” Benitz said in a statement.