Jersey Oil & Gas Increases Stake in Verbier Discovery License to 100%
LSE-listed Jersey Oil & Gas Plc (JOG) has acquired the remaining 12% working interest in license P2170, contains the majority of Verbier oil discovery in the UK North Sea through the acquisition of CIECO V&C (UK) Ltd. As a result, JOG will hold a 100% operated interest in the license.
Under the terms of a Sale and Purchase Agreement (SPA) with Japanese multinational conglomerate ITOCHU Corp. and state-owned enterprise Japan Oil Gas & Metals National Corp. (JOGMEC), JOG will acquire 100% of the issued share capital of CIECO V&C (UK) for a total cash consideration of approximately £2.65 million, including certain contingent payments.
The total consideration is comprised of an initial cash consideration of £150,000, an additional contingent consideration of £1.5 million in cash, payable upon receipt of consent from the UK’s Oil & Gas Authority (OGA) for a Field Development Plan (FDP) in respect of the discovery, and a further contingent consideration of £1.0 million in cash, payable no later than one year after first oil from the license area under the FDP.
P2170 (Blocks 20/5b and 21/1d) is located in the Greater Buchan Area (GBA) of the UK Continental Shelf, situated approximately 100 km north-east of Aberdeen in water depths of 100 to 128 meters. The blocks are contiguous with JOG’s existing interest in blocks 20/5d and 21/1a, containing the Buchan oil field and J2 oil discovery. JOG plans to initiate a work program to advance the Verbier discovery to an FDP decision with the primary objective being to develop it as part of its overall GBA development plans.
“The corporate acquisition of CIECO V&C completes 100% ownership of the final component of our GBA project that was not previously wholly owned by JOG and positions us perfectly ahead of completion of Concept Select and the planned launch of JOG’s wider GBA sales process. This acquisition increases JOG’s discovered resources, adds material value and exploration upside in addition to useful tax losses,” said Andrew Benitz, CEO of JOG.
The transaction is subject to customary closing conditions, including receipt of regulatory approval and ITOCHU acquiring JOGMEC’s shares in CIECO V&C ahead of completion, the timing for which is anticipated to coincide with the OGA’s approval process.