TIDMJOG

RNS Number : 4974A

Jersey Oil and Gas PLC

02 June 2021

2 June 2021

Jersey Oil and Gas plc

("Jersey Oil & Gas", "JOG" or the "Company")

Greater Buchan Area Development Project

Operational Update

Jersey Oil & Gas (AIM: JOG), an independent upstream oil and gas company focused on the UK Continental Shelf ("UKCS") region of the North Sea, is pleased to provide an operational update in respect of its Greater Buchan Area ("GBA") Development Project.

Highlights

-- Subsurface evaluations and independent peer review of subsurface and facilities concept select scopes completed

   --      Concept Select Report ("CSR") issued to the UK Oil and Gas Authority ("OGA") 

o As outlined in the report, the preferred GBA development concept is for a fully electrified Net-Zero solution, estimated to emit carbon at a rate of less than 1kg of CO(2) per barrel of oil equivalent ("boe") produced, significantly below the North Sea average of approximately 22kg of CO(2) /boe

   --      'Supply Chain Action Plan' issued to the OGA 
   --      Evaluation of export pipeline options underway 

-- In line with the strategy to electrify the GBA development, applications for UK electricity grid connection submitted and pipeline & subsea electricity cable survey contract awarded

o In addition to being economically attractive to electrify the planned Buchan platform, the installation of a subsea electricity cable has the potential to facilitate the electrification of other nearby platforms, with collaboration efforts ongoing

   --      Front-End Engineering and Design ("FEED") tendering ongoing 
   --      Application made to the OGA to be appointed OSD Installation Operator 
   --      Farmout process underway with broad interest and participation from multiple parties 

Andrew Benitz, CEO of Jersey Oil & Gas, commented :

"The submission of the Concept Select Report to the OGA represents a significant milestone for JOG in our journey to deliver maximum value from the Greater Buchan Area.

"Our chosen development concept ensures that, through electrification, the GBA Development could produce less than 1kg of CO(2) per barrel produced; fully aligned with the UK's "Net-Zero" targets. The submission of the CSR ahead of schedule is testament to the growing project team's continued hard work."

Concept Select Report

As detailed in JOG's announcement of 3 March 2020, subsurface and facilities evaluation of concept options is complete. All aspects of the work have been independently peer reviewed by Vysus Group, with concept cost estimates and delivery schedules benchmarked by PCP Ltd.

The selected concept for the GBA development is planned to be executed in three phases:

-- Phase 1 will deliver a single integrated wellhead, production, utilities and quarters (WPUQ) Platform located at the Buchan field. Production from the reservoirs will be supported by injection of both produced water and seawater and down-hole electric pumps (ESPs). The facility will be normally manned. The Buchan wells will be drilled utilising a heavy-duty jack-up (HDJU) located over a 12 slot well bay. The Phase 1 facilities will be designed to accommodate Phase 2 and Phase 3 of the development.

-- Phase 2 will develop the J2 West, J2 East and Verbier East discoveries via a subsea tie-back to the GBA platform.

-- Phase 3 will develop the Verbier West discovery, via connection to the Phase 2 subsea infrastructure.

The CSR, summarising the Company's findings from the 'Select' phase, has been finalised and submitted to the OGA ahead of the 31 July 2021 P2498 licence commitment date for submission.

Supply Chain Action Plan

A 'Supply Chain Action Plan' ("SCAP") has been submitted to the OGA, detailing contract strategies and supply chain engagement plans for the GBA Phase 1 Development. The SCAP details JOG's aim to establish an open and honest relationship with all contractors and suppliers, delivering a procurement and supply chain management system that is responsible, ethical and professional. In line with this approach, JOG is now a signatory to the Department for Business, Energy & Industrial Strategy's Prompt Payment Code ("PPC"). The PPC is a voluntary code of practice which sets standards for payment practices within the supply chain. JOG is committed to meeting the objectives of the PPC, as well as encouraging its current and future suppliers to also become signatories to the code.

Export Option Evaluation

The Buchan location benefits from close proximity to existing export infrastructure for both oil and gas. In February 2021, JOG issued formal requests for service to several infrastructure owners, in accordance with Oil & Gas UK's Infrastructure Code of Practice. Indicative offers have now been received and are subject to a detailed economic and technical assessment by the Project team. This work is scheduled to be completed to inform FEED.

Electrification

In line with the UK Government's "Net-Zero" policies, JOG recognises the need for a low carbon power solution and has an aspiration to deliver production from the GBA Development Project at an industry-leading carbon intensity level. Accordingly, and in line with the Company's recently announced Corporate Carbon Policy, the CSR proposes a development powered through the provision of a UK national grid connection via the installation of a subsea cable to shore. This "Net-Zero" solution for the GBA Development Project is economically attractive, with overall carbon emissions from the GBA with platform electrification estimated to be less than 1kg/boe.

Accordingly, formal applications for a power supply connection have been submitted to both National Grid and Scottish Hydro Electric Transmission.

The Board believes the GBA is optimally located in the heart of the UK Central North Sea such that there is exciting potential for JOG to be an enabler for regional electrification. Collaboration with other regional operators could reduce overall capital costs associated with the subsea cable infrastructure. The Company continues to progress collaboration opportunities that may ultimately lead to a reduction in the cost of the electrification infrastructure.

Offshore Surveys

JOG plans to conduct a series of offshore surveys in Q2 and Q3 2021 to support phase 1 of the GBA development. A contract has been awarded for the acquisition of geotechnical and environmental baseline data along the subsea power cable route and oil/gas export option routes. The acquired data from the route surveys will input into the subsea facilities FEED basis of design and support development of the Environmental Statement, required for the Field Development Plan . In addition, a geotechnical survey is planned at the Buchan location to acquire soils data to inform the design of the GBA Platform substructure, with tenders under evaluation.

Define Phase Preparation

Tendering processes for the provision of FEED engineering services were commenced at the end of Q1 2021. Separate tenders for the provision of engineering services for topsides and substructure have been received and are now subject to ongoing technical and commercial evaluation. Invitations to tender have also been issued for the provision of subsea engineering services and well engineering services. Tenders are due to be received for these scopes of work by the end of June 2021. Application made to the OGA to be appointed OSD Installation Operator.

GBA Farmout Process

The GBA farmout process, which was launched in March 2021, has received broad interest and participation from multiple parties. With the diligence process ongoing it is premature to comment further on the process at this stage.

Next Steps

Activities to support the decision gate for progression into the 'Define' phase of the GBA Project are on schedule, with review expected to take place in Q3 2021.

Enquiries :

 
Jersey Oil and Gas plc  Andrew Benitz, CEO   C/o Camarco: 
                                              Tel: 020 3757 4983 
Strand Hanson Limited   James Harris         Tel: 020 7409 3494 
                         Matthew Chandler 
                         James Bellman 
Arden Partners plc      Paul Shackleton      Tel: 020 7614 5900 
                         Benjamin Cryer 
finnCap Ltd             Christopher Raggett  Tel: 020 7220 0500 
                         Tim Redfern 
 
Camarco                 Billy Clegg          Tel: 020 3757 4983 
                         James Crothers 
 

Notes to Editors :

Jersey Oil & Gas is a UK E&P company focused on building an upstream oil and gas business in the North Sea. The Company holds a significant acreage position within the Central North Sea referred to as the Greater Buchan Area ("GBA"), which includes operatorship and 100% working interests in blocks that contain the Buchan oil field and J2 and Glenn oil discoveries and an 100% working interest in the P2170 Licence Blocks 20/5b & 21/1d, that contain the Verbier oil discovery and other exploration prospects.

JOG's total GBA acreage is estimated by management to contain 190 million barrels of oil equivalent ("mmboe") of discovered P50 recoverable resources net to JOG, in addition to significant exploration upside potential of approximately 220 mmboe of prospective resources in close proximity to the Company's planned Buchan platform. JOG has recently concluded the Concept Select phase of an FDP for the Greater Buchan Area and plans to progress into Front End Engineering and Design (FEED) later this year.

JOG is focused on delivering shareholder value and growth through creative deal-making, operational success and licensing rounds. Its management is convinced that opportunity exists within the UK North Sea to deliver on this strategy and the Company has a solid track-record of tangible success.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018.

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June 02, 2021 02:00 ET (06:00 GMT)

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