Business
Farm-out of UK Seaward Licence P.2170 to Statoil
Farm-out of UK Seaward Licence P.2170 to Statoil.
About this update from Jersey Oil & Gas Plc
[{"type":"text","content":"\n \nRNS Number : 8382H Jersey Oil and Gas PLC 23 August 2016 \n\n \n23rd August 2016\n \nJersey Oil and Gas plc\n(\"Jersey Oil & Gas\" or the \"Company\")\n \nFarm-out of an Interest in UK Seaward Licence P.2170, Blocks 20/5b and 21/1d to Statoil\n \nJersey 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 announce that alongside its co-venturer, CIECO Exploration and Production (UK) Limited (\"CIECO\") it has entered into a binding, conditional sale and purchase agreement (\"SPA\") with Statoil (U.K.) Limited (\"Statoil\"), a leading multinational oil and gas company, for the farm-out to Statoil of, in aggregate, a 70 per cent. working interest in UK Seaward Licence P.2170, Blocks 20/5b and 21/1d (the \"P.2170 Licence\") located in the UK Central North Sea (the \"Farm-out\"). \n \nThe Company currently holds, through its wholly owned subsidiary, Trap Oil Limited, a 60 per cent. interest in the P.2170 Licence with CIECO holding the remaining 40 per cent. interest. On completion of the Farm-out, Statoil will hold 70 per cent. as operator, the Company will retain an 18 per cent. interest (via Trap Oil Limited), of which 10 per cent. will continue to be carried by CIECO pursuant to the pre-existing arrangements between the parties, and CIECO will retain a 12 per cent. interest. \n \nHighlights\n\nUnder the terms of the SPA, Statoil will acquire an aggregate 70 per cent. working interest in the P.2170 Licence from the Company and CIECO, and will be appointed the designated operator for a total up-front cash consideration of US$2 million, of which US$1.2 million will be payable to Jersey Oil & Gas (the \"Initial Consideration\").\n\n\nThe P.2170 Licence area contains two medium risk independent oil prospects identified with unaudited estimated mean in place volumes of 300 and 212 million stock-tank barrels (\"Mmstb\") respectively.\n\n\nStatoil will fund all costs up to US$25 million in respect of the first exploration well to be drilled on the P.2170 Licence (the \"Exploration Well\"), with any cost over-runs to be satisfied by each party in proportion to their working interests.\n\n\nPlanning of the Exploration Well is expected to commence this year, with drilling potentially planned for 2017....