Business
GBA Farm-Out to Serica Energy
GBA Farm-Out to Serica Energy.
About this update from Jersey Oil & Gas Plc
[{"type":"text","content":"\n\n23 November 2023\n \nJersey Oil and Gas plc\n(\"Jersey Oil & Gas\", \"JOG\" or the \"Company\")\n \nGBA Farm-Out to Serica Energy\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 it has agreed to farm-out a 30% interest in the Greater Buchan Area (\"GBA\") licences to Serica Energy (UK) Limited (the \"Serica Farm-out\"). Upon completion of the Serica Farm-out, JOG will have a 20% interest in the GBA licences and a full carry on the capital expenditure required to bring the Buchan field into production.\n \nHighlights:\n§ Fully Funded: The transaction delivers material value to JOG and results in the Company having a fully funded 20% interest in the on-going Buchan redevelopment project\n§ Strong industry partner: Serica is a leading mid-tier UK oil and gas company producing more than 40,000 barrels of oil equivalent per day, further strengthening the quality of the GBA joint venture\n§ Milestone payments: $18 million of the $38 million cash payments attributable to the two GBA farm-outs will have been received upon completion of the Serica transaction\n§ Value creation: Clear path to development sanction and first oil, with JOG's fully funded position meaning the Company is underpinned by exposure to zero-capex flowing barrels\n§ Future cash generation: Once onstream, JOG will be a non-operated partner entitled to 20% of production from the Buchan field\n§ Low carbon development: redeployment of an existing floating production, storage and offloading (\"FPSO\") vessel that is planned for future connection to a nearby floating wind power development makes the Buchan redevelopment solution the option with the lowest full-cycle carbon footprint\n \nTransaction Summary\nThe farm-out transaction with Serica is on identical pro-rata terms to that previously completed with NEO Energy (\"NEO\") earlier in the year. In aggregate, the two transactions result in JOG retaining a 20% interest in the GBA licences, a full carry on the capital expenditure required to bring the Buchan field into production and a number of milestone cash payments. Upon completion of the Serica Farm-out, the combined cash payments received from the two farm-outs will be over $18 million, with a...