Jersey Oil & Gas PLC (LON:JOG) saw their shares spike by 45% when the farm-out to Statoil of two North Sea blocks was completed. The Norwegian oil giant will be taking an operational stake of 70% in UK Seaward License P.2170, more specifically blocks 20/5b and 21/1d, located in the UK Central North Sea.
Jersey Oil will get US$540,000, with the remainder of the US$1.2 million cash consideration being set aside for the company’s partners in the original development. According to the deal, Statoil will be paying approximately US$25 million for their first exploration well on the license in question.
The project is believed to hold more than 500 million barrels of oil equivalent, spread out over two sectors of 300 million and 212 million barrels of oil respectively.
The CEO of Jersey Oil & Gas, Andrew Benitz, stated that the company is happy with the farm-out completion for Statoil and that the P.2170 license region has a lot of potential in terms of exploration and oil discovery. He also stated the firm was looking forward to drilling on of the prospective sites with a partner and they hope it will take place sometime during 2017.
Jersey Oil will maintain an 18% stake. Of the latter, CIECO will carry 10%, but it already owns the other 12%.
Jersey Oil & Gas shares climbed to 65 pence, representing a 20.25 pence increase.