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UK: Jersey Oil and Gas announces final results for Y/E 31 December 2022


24 May 2023

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AIM-listed Jersey Oil & Gas, an independent upstream oil and gas company ‎focused on the UK Continental Shelf ('UKCS') region of the North Sea, has announced its audited financial results for the year ended 31 December 2022 and the date of the forthcoming Annual General Meeting ('AGM').

Highlights

  • In April 2023 JOG executed agreements to farm-out a 50% working interest in the GBA licences to NEO Energy ("NEO") in exchange for various cash payments and the carry of a proportion of the Company's future development expenditure
  • The Company has secured a technically and financially strong partner to move the GBA development forwards into production, with NEO set to become operator of the GBA licences following completion of the transaction
  • In addition to milestone related cash payments associated with the Buchan field development totalling approximately $24 million, the transaction results in the Company being fully carried for its $12.5 million share of costs up to Field Development Plan ("FDP") approval
  • Following FDP approval, JOG will be carried for 12.5% of its 50% share of the Buchan field development costs by NEO (equivalent to a 1.25 carry ratio)
  • With the route to monetisation of the GBA resources established, the Company has the opportunity to deliver long term shareholder value through unlocking the multiple value catalysts that stem from execution of the GBA development programme
  • It is anticipated that the farm-out will be completed around the end of the second quarter of 2023

GBA Development

  • During 2022 the Company was actively engaged with multiple counterparties regarding the planned divestment of an interest in the GBA licences
  • Technical and commercial diligence has been completed on the range of different development options that could be used for future production from the GBA
  • With the introduction of NEO to the GBA, the partnership will work together to finalise selection of the preferred development solution from a short list of attractive options, with first production targeted for 2026
  • Upon selection of the preferred development solution, the project will move into "Front End Engineering & Design" activities along with preparation of the required FDP that is planned for submission to the North Sea Transition Authority ("NSTA") for approval in the first half of 2024

 Attractive Outlook

  • The NEO farm-out delivers significant value to the Company, not least by securing a fully funded position through to FDP submission, and additionally unlocks the route to monetisation of the GBA resources
  • JOG will retain a 50% working interest in the GBA following completion of the farm-out (with 12.5% of development costs carried by NEO) and to catalyse further shareholder value, the Company intends to farm-out additional GBA equity such that it ultimately retains a 20-25% fully carried interest in the development
  • Pursuit of the Company's corporate growth strategy, through the execution of accretive acquisitions, remains an important objective
  • The Company is well positioned with a cash balance at the end of 2022 of approximately £6.6 million, which is set to be enhanced by the various milestone payments incorporated into the farm-out transaction terms agreed with NEO

Andrew Benitz, Chief Executive Officer, commented:

'2022 was an instrumental year in securing the future success of the Company.  The GBA farm-out process involved extensive interactions with multiple counterparties during the year, culminating in the transaction that was announced in April of this year with NEO Energy.  The GBA is a high-quality re-development, which is on track to generate significant value for the Company and its shareholders.  With the route for execution of the development programme now firmly established, the Company looks forward to unlocking the many value catalysts that mark the run up to approval of the project and beyond.'

Annual General Meeting

The Company also announces that its 2022 Annual Report and Financial Statements together with the AGM Notice and associated Form of Proxy are now available on the Company's website (www.jerseyoilandgas.com) and will be posted today to those shareholders who have elected to receive hardcopy shareholder communications from the Company.

The Company will hold its AGM in respect of its financial year ended 31 December 2022 on 20 June 2023 at 13.00 at the offices of Pinsent Masons LLP, 30 Crown Place, Earl Street, London EC2A 4ES.

Corporate Presentation

An updated corporate presentation has been placed on the Company's website. See: Corporate Presentation May 2023

Original article link

Source: Jersey Oil & Gas





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