Jersey gains operatorship of UKCS license P2170

May 20, 2020

Jersey Oil & Gas is operator of License P2170 on the UK Continental Shelf after closing a deal to acquire 70% working interest from Equinor UK Ltd. The license contains Blocks 20/5b and 21/1d and includes the Verbier oil discovery made by Equinor (then Statoil) in the Moray Firth off Scotland in 2017 (OGJ Online, Nov. 6, 2017).

With the acquisition, reported in January, Jersey could potentially develop Verbier as part of the Greater Buchan Area hub which consists of the Buchan oil discovery and the J2 and Glenn oil discoveries. In aggregate, Jersey estimates some 144 MMboe of gross recoverable resources can be commercially produced through the Buchan hub. The license also benefits from multiple exploration prospects with value potential through tiebacks to the proposed hub, the company said in a release May 20.

Jersey said in 2019 a dry well drilled to appraise the discovery lowered resource potential below the initial resource estimate of 25-130 million boe of oil and gas, but that a large part of the mapped area of the discovery northwest of the appraisal well and deeper-pool potential remain untested (OGJ Online, Apr. 10, 2019).

Consideration consists of two milestone payments and a royalty based on volumes produced from the Verbier Upper Jurassic (J62-J64) reservoir. The deal is not subject to upfront cash payments.

The acquisition increases Jersey Oil & Gas total working interest in License P2170 to 88%, the level at which it held ownership prior to 2016 when CIECO Exploration & Production (UK) Ltd. and Jersey subsidiary operating company Trap Oil Ltd. agreed to farmout the interest to Equinor (then Statoil). CIECO holds the remaining 12%.