Business
Farm-out of Interest in Seaward Production Licence
Farm-out of Interest in Seaward Production Licence.
About this update from Jersey Oil & Gas Plc
[{"type":"text","content":"\n \nRNS Number : 7943K Jersey Oil and Gas PLC 05 January 2016 \n\n \n5 January 2016\n \nJersey Oil and Gas plc\n(\"Jersey Oil & Gas\" or the \"Company\")\n \nFarm-out of Interest in Seaward Production Licence P. 1989 Blocks 14/11, 12 & 16 \n \nJersey Oil & Gas (AIM: JOG), an independent upstream oil and gas company focused on the UK Continental Shelf region of the North Sea (\"UKNS\"), is pleased to announce that it has signed a sales and purchase agreement (the \"SPA\") with Azinor Catalyst Limited (\"Catalyst\") for the farm-out of its 50 per cent. interest in Seaward Production Licence P.1989 Blocks 14/11, 12 & 16 (the \"Licence\") held via its wholly owned subsidiary Trap Oil Limited (\"Trap\"). The balancing 50 per cent. interest in the Licence is currently held by Norwegian Energy Company UK Limited (\"Noreco\"). \n \nThe Licence area located in the North West Witch Ground Graben in the Moray Firth, was awarded as a Traditional licence in the Department of Energy and Climate Change's (\"DECC\") 27th Licensing Round and prospectivity has been identified in Early Cretaceous sediments. Under the terms of the SPA, Catalyst has agreed to acquire 100 per cent. of the Licence from both Trap and Noreco, and on completion of the transaction will be appointed as Operator. The SPA is subject to approval by DECC. By way of consideration, Catalyst will undertake to:\n· carry out certain firm work commitments (the \"Firm Commitments Work Programme\"), as set out in the terms of the Licence, including the drill-or-drop obligation in respect of an exploration well; and\n· make certain payments to each of Noreco and Trap contingent on the occurrence of certain future events, namely:\no US$2m within 90 days of the date when an exploration well, drilled within the Licence area, exceeds a threshold of net-pay with a vertical extent of no less than twenty metres of sands with a hydrocarbon saturation above sixty per cent. and a permeability cut-off of 1mD; and\no a further US$2m within 90 days of the date when a Field Development Plan in respect of the aforementioned exploration well is approved by the Secretary of State for Energy and Climate Change.\n \nAndrew Benitz, CEO of Jersey Oil & Gas, commented:\n\"We are plea...