Jersey Oil Agrees to Sell 70% in North Sea Assets to Statoil; Shares Rise -- Update
August 23 2016 - 04:32AM
Dow Jones News
By Alex MacDonald
LONDON--Shares in Jersey Oil & Gas PLC (JOG.LN) rose Tuesday
after it agreed to give Norwegian oil major Statoil ASA (STO) a 70%
stake in a series of U.K. North Sea projects in return for a $2
million up-front cash payment and the promise to spend up to $25
million on drilling a new well.
Jersey Oil and its partner CEICO Exploration and Production own
60% and 40%, respectively, of License P.2170, Blocks 20/5b and
21/1d. Once the deal is completed, Statoil will own 70% of the
assets and become the operator. Jersey will retain an 18% stake, of
which 10% will continue to be carried by CIECO, and CIECO will
retain a 12% stake in the assets. Jersey Oil will earn $1.2 million
of the up-front cash payment.
At 0733 GMT, Jersey Oil's shares were up 20% at 36.5 pence a
share, resulting in a market capitalization of 3.1 million pounds
($4 million).
"We are delighted to have secured a farm-out partner of the
calibre of Statoil," said Andrew Benitz, Chief Executive of Jersey
Oil.
The project is estimated to hold over 500 million barrels of oil
across two prospects estimated at 300 million and 212 million
barrels each.
Statoil will fund all costs up to $25 million to drill the first
exploration well on the P.2170 License. Planning of the well is
expected to start this year, with drilling potentially planned for
2017.
"This is very encouraging for the story and suggests much more
materiality to the portfolio than anticipated," said FirstEnergy
Global Research, which has Jersey's rating under review. The broker
said it hasn't yet applied a value to the proposed well.
Write to Alex MacDonald at alex.macdonald@wsj.com
(END) Dow Jones Newswires
August 23, 2016 04:17 ET (08:17 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Equinor ASA (NYSE:EQNR)
Historical Stock Chart
From Feb 2024 to Mar 2024
Equinor ASA (NYSE:EQNR)
Historical Stock Chart
From Mar 2023 to Mar 2024