Jersey gains full control of North Sea asset with CIECO V&C buy
North Sea-focused Jersey Oil & Gas (JOG) has entered into a conditional sale and purchase agreement (SPA) to acquire the entire issued share capital of CIECO V&C, which will give it full ownership of a North Sea licence located within its Greater Buchan Area project.
CIECO V&C is currently owned by ITOCHU Corporation and Japan Oil, Gas and Metals National Corporation (JOGMEC).
Jersey explained in a statement on Thursday that the acquisition secures an additional 12 per cent working interest in Licence P2170 Blocks 20/5b & 21/1d.
As a result, the acquisition is providing Jersey with 100 per cent ownership and full control of Licence P2170, located within its Greater Buchan Area (GBA) development project.
The acquisition also increases JOG’s ownership of the Verbier oil discovery, the majority of which sits within Licence P2170.
It increases ownership of multiple high-impact exploration opportunities within Licence P2170, including three drill-ready prospects: Verbier Deep, Wengen, and Cortina.
Jersey also noted that it simplifies licence ownership ahead of the planned GBA farm-out process.
CIECO V&C has approximately £15 million ($20.01M) of tax losses, which are expected to provide additional value to Jersey Oil & Gas following the first oil.
Principal acquisition terms include a completion payment of £150,000 ($161,300) in cash and contingent payments of £1.5 million ($2 million) in cash upon consent from the UK’s Oil & Gas Authority (OGA) for a Field Development Plan in respect of the Verbier discovery in the Upper Jurassic (J62-J64) Burns Sandstone reservoir located on Licence P2170; and £1 million in cash payable not later than one year after first oil from all or any part of the area which is the subject of the FDP.
Completion of the acquisition is subject to OGA approval. The acquisition is also contingent on ITOCHU acquiring JOGMEC’s shares in CIECO V&C ahead of completion, the timing for which is anticipated to coincide with the OGA’s approval process.
Andrew Benitz, CEO of JOG, commented: “The corporate acquisition of CIECO V&C completes 100 per cent ownership of the final component of our GBA project that was not previously wholly-owned by JOG and positions us perfectly ahead of the completion of Concept Select and the planned launch of JOG’s wider GBA sales process.
“This acquisition increases JOG’s discovered resources, adds material value and exploration upside in addition to useful tax losses”.