UK oil & gas player firming up farm-out talks with ‘well-funded industry heavyweight’
UK-headquartered Jersey Oil & Gas plc is in the process of finalising a farm-out deal with an undisclosed operator for an asset on the UK Continental Shelf region of the North Sea.
Jersey Oil & Gas revealed on Friday, 31 March 2023, that it was in “advanced exclusive negotiations” with a “significant” UK North Sea operator. According to the company, heads of terms have been agreed for the farm-out of a material interest in the Greater Buchan Area (GBA) licences to this operator, thus, both parties are working towards finalising a fully termed agreement in the near future. To this end, an exclusivity period until 30 April 2023 has been agreed.
Andrew Benitz, CEO of Jersey Oil & Gas, commented: “We are pleased to be in advanced exclusive negotiations with a well-funded industry heavyweight and whilst there can be no guarantees of a successful conclusion, we are aiming to finalise the farm-out in the near future and look forward to updating shareholders shortly.”
Back in March 2021, Jersey revealed its preferred development concept for the Greater Buchan Area development with Phase 1 being a single integrated wellhead, production, utilities, and quarters (WPUQ) platform located at the Buchan field. At the time, the firm disclosed that it would launch a farm-out process ahead of the final investment decision expected in 2022. A few days later, Jersey confirmed that the planned farm-out process was formally launched.
As explained by Jersey, Phase 1 facilities were expected to be designed to accommodate Phase 2 and Phase 3 of the development. While Phase 2 was expected to develop the J2 West, J2 East, and Verbier East discoveries via a subsea tie-back to the GBA platform, Phase 3 was planned to develop the Verbier West discovery via connection to the Phase 2 subsea infrastructure. The field life was anticipated to be 31 years.
Based on Jersey’s plans from 2021, the UK player was looking to produce the first oil from the first phase in the fourth quarter of 2025 while the second phase startup would be in 2027, and Phase 3 in 2028. The facilities will be powered from shore.
Located in the heart of the Central North Sea, Jersey’s stake in the GBA project includes operatorship and 100 per cent working interests in blocks that contain the Buchan oil field and J2 oil discovery and a 100 per cent working interest in the P2170 Licence Blocks 20/5b & 21/1d, that contain the Verbier oil discovery and other exploration prospects.
The total GBA acreage is estimated to contain 172 million barrels of oil equivalent (MMboe) of discovered P50 recoverable resources net in addition to the significant exploration upside potential of approximately 168 MMboe of prospective resources close to the firm’s planned Buchan platform.