TIDMJOG
RNS Number : 5275M
Jersey Oil and Gas PLC
22 September 2021
22 September 2021
Jersey Oil and Gas plc
("Jersey Oil & Gas", "JOG" or the "Company")
Interim Results for the Six Month Period Ended 30 June 2021
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 announce it's unaudited Interim
Results for the six month period ended 30 June 2021.
Highlights :
-- Material increase in our resource estimates for the Buchan
oil field following completion of extensive reservoir simulation
modelling
o Contingent P50 technically recoverable resources for the
Buchan oil field now estimated at 126 MMstb
o Contingent P50 technically recoverable resources for the
Greater Buchan Area ("GBA") Core Area (Buchan, J2 and the Verbier
discoveries) increased to an estimated 172 MMboe
-- Concept Select Report completed and submitted to the UK's Oil and Gas Authority ("OGA")
o Detailed report sets out a three phase development, with Phase
1 designed to develop the Buchan oil reservoir; Phase 2 the J2
West, J2 East and Verbier East oil discoveries; and Phase 3 the
Verbier West oil discovery (the "GBA Development")
o Report also includes JOG's preference for the GBA Development
to be powered by electricity, which would significantly reduce the
carbon emissions associated with production from the GBA
Development
-- Oversubscribed placing and subscription to raise, in aggregate, GBP16.6m gross
-- Acquisition of the remaining 12% interest in licence P2170
containing the Verbier discovery from CIECO V&C (UK) Limited to
bring our interest to 100% across all of our GBA licences
-- Appointment of Les Thomas to the Board as a non-executive director
-- Launched sales process to farm-out an interest in our GBA
licences to secure an industry partner and funding towards our
future share of costs in the development
-- Strong cash position of approximately GBP17m at the period end
Post Period End :
-- Offshore survey to acquire geotechnical and environmental baseline data completed
-- Technical and economic evaluation of P2497 (Zermatt) and
P2499 (Glenn) licences completed, with JOG electing not to progress
to the next licence phase and relinquish these non-core
licences
-- OGA has approved JOG's application to be the 'Installation
Operator' for the 'Design Phase' of the planned Buchan platform
Outlook :
-- Farm-out process ongoing and engaged in discussions with both industry parties and potential infrastructure funders
-- Regional electrification collaboration within the Central
North Sea is building momentum amongst industry parties, with the
GBA ideally located to be an integral part of this initiative
Andrew Benitz, CEO of Jersey Oil & Gas, said:
"The first half of 2021 has been a busy period for JOG.
Extensive reservoir modelling was completed leading to a
significant increase in management's estimates of the GBA's
resources and the delivery to the OGA of the GBA Concept Select
Report, which includes our preference for a fully electrified
platform. The OGA's approval of the appointment of JOG as OSD
Installation Operator represents a significant endorsement of our
capabilities and competencies to deliver GBA facilities of the
highest technical integrity that will be both safe to operate and
environmentally sound.
"Our GBA farm-out process was launched and is ongoing, with
active engagement with both industry parties and infrastructure
funders, the latter having expressed funding interest particularly
with respect to electrification of the development and the
potential regional collaboration opportunities that exist. We also
launched our Carbon Policy and are targeting 'Net Zero' emissions
from our GBA Development project at the start of first oil.
"I would like to thank shareholders for their ongoing support
and look forward to providing further updates on our future
progress."
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
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 oil discovery 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
172 million barrels of oil equivalent ("MMboe") of discovered P50
recoverable resources net to JOG, in addition to significant
exploration upside potential of approximately 168MMboe 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) following greater
clarity being obtained on regional electrification options and
funding.
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.
Chairman's Statement
Overview
During the first six months of 2021, Jersey Oil and Gas ("JOG"
or the "Company") has focused on developing its core licence
interests, which we refer to as the Greater Buchan Area (the "GBA")
consisting of licences P2498 (the Buchan oil field and J2 oil
discovery) and P2170 (the Verbier oil discovery). Our activities
took place against a Brent oil price that started the year at
approximately US$50 per barrel and that had risen to approximately
US$70 per barrel at the end of the half year.
Operational Highlights
During the period, we were pleased to report a material increase
in our resource estimates for the Buchan oil field following the
completion of extensive reservoir simulation modelling. Our
estimate of contingent P50 technically recoverable resources for
the Buchan oil field is now 126 million stock tank barrels
("MMstb"), with our estimate of contingent P50 technically
recoverable resources for the GBA Core Area (Buchan, J2 and the
Verbier discoveries) being increased to 172 million barrels of oil
equivalent ("MMboe"). We also completed our Concept Select Report
("CSR"), which has been submitted to the OGA. This detailed report
sets out how the resources in our core GBA licence interests will
be developed which, after assessing numerous alternatives, has been
structured into three phases with Phase 1 designed to develop the
Buchan oil reservoir, Phase 2 the J2 West, J2 East and Verbier East
oil discoveries, and Phase 3 the Verbier West oil discovery. This
phased approach has the advantage of generating an early income
stream which can be offset against future phased development
expenditure. The CSR also includes JOG's preference for the GBA
Development to be powered by electricity supplied by a cable from
shore to the proposed GBA production platform, which would
significantly reduce the carbon emissions associated with
production of oil and gas from the GBA Development. In support of
this we have undertaken a subsea survey to cover a potential cable
route from shore to the proposed Buchan platform location.
Capital Raising
In March 2021, we undertook an oversubscribed placing and
subscription which raised, in aggregate, GBP16.6m gross.
100% Ownership of the Verbier Discovery
During the first half of the year we also completed the
acquisition of CIECO V&C (UK) Limited, whose sole asset in the
UKCS was the 12% interest in the Verbier discovery not already
owned by the Company, thereby bringing JOG's interest in the P2170
licence up to 100%.
Non-Executive Director Appointment
In April 2021, we were very pleased to announce the appointment
of Les Thomas as a non-executive director of the Company. Mr Thomas
has substantial experience in the oil and gas industry, including
being a former CEO of Ithaca Energy Inc., which operates in the
UKCS.
Regional Electrification
Since acquiring our licence interests in the GBA, in August
2019, there has been a significant shift in industry attitude and
government policy towards implementing a low carbon approach to
extracting hydrocarbons from the UKCS. As part of this process, JOG
has sought to lead the way through selecting our preferred
development concept for the GBA to be a low carbon, fully
electrified project powered from shore. At the same time, the GBA
has the potential to be an integral part of an area-wide
electrification project via collaboration with other industry
parties and stakeholders. Such a collaborative approach has the
advantage of potentially materially reducing capex and opex through
shared investment, thereby enhancing project economics for the GBA.
We look forward to working with other industry parties as regional
studies advance during the remainder of this year.
Financing the GBA Development
In Q2 2021, we launched a farm-out process seeking to secure an
industry partner in this early phase of the GBA Development to join
JOG in unlocking the considerable value that we believe exists in
this project. This process is ongoing, and we will be updating
shareholders as soon as we are in a position to do so.
Energy Transition
We fully support a managed transition away from CO(2) intensive
power supply for the UK. We believe that this process will take
time and that there needs to be a smooth and coordinated approach
to such a transition whereby a low carbon, fully electrified GBA
Development has an important part to play, helping to mitigate the
need for the UK to acquire high greenhouse gas ("GHG") emissions
produced oil from the international markets, often supplied by
companies without the governance and regulatory framework which UK
operators benefit from. A co-ordinated industry effort to invest in
making the UK North Sea a basin leader in low-carbon energy supply
will help provide a robust social licence to operate for those
investing in and providing longer-term energy security for the UK,
as the transition process proceeds. Like all of the other North Sea
industry participants, we will be closely following the United
Nations Climate Change Conference (COP26) taking place in Glasgow
in early November 2021, which we expect will continue to reflect
the current government policy of maximising the economic returns
from the UK North Sea, whilst reducing emissions from existing and
new production.
Marcus Stanton
Non-Executive Chairman
22 September 2021
Chief Executive's Report
Overview
A busy first half of 2021 saw the Company complete its
subsurface evaluation and concept select work in respect of its
flagship Greater Buchan Area (GBA) Development project and the
subsequent launch of our planned farm-out process. We were pleased
to report a material increase in our technically recoverable
resource estimates for the Buchan oil field following completion of
extensive reservoir simulation modelling. Our preferred development
concept is based on P50 technically recoverable resource estimates
of, in aggregate, 172 MMboe of light sweet crude and associated gas
within the core GBA Development, which includes the Buchan oil
field and J2 and Verbier oil discoveries.
JOG aims to deliver production from the planned GBA Development
project at an industry-leading carbon intensity level by way of the
provision of power via platform electrification, as evidenced in
certain fields in the Norwegian sector. Overall carbon emissions
from the GBA Development, utilising platform electrification, are
estimated by management at <1kg/boe, against an industry average
in the UK North Sea of approximately 22kg/boe. We also announced
highly attractive estimated project economics for this low carbon
concept, with pre-tax free cashflow of US$6.4 billion with an NPV
(pre-tax) of US$1.7 billion. Operating costs during plateau
production are estimated at US$8/boe to US$9/boe, with a payback
period estimated at under 3 years. Plateau production is estimated
for more than 3 years. Total project costs based on current day
values are estimated to be approximately US$30/boe.
Our sales process is ongoing with engagement with both industry
parties and infrastructure funders, the latter having expressed
funding interest particularly with respect to electrification of
the development and the potential regional collaboration
opportunities that exist.
Operational Update
Working closely with Schlumberger Oilfield UK plc
("Schlumberger"), JOG completed extensive simulation modelling of
the Buchan reservoir, using their proprietary INTERSECT high
resolution reservoir simulation software, which was peer reviewed
by Vysus Group ("Vysus"). As a consequence, our estimate of
contingent resources for the Buchan oil field was significantly
increased to 126 MMstb, with our estimate of contingent resources
for the GBA Core Area (Buchan, J2 and the Verbier discoveries)
being increased to 172 MMboe.
Having completed our extensive subsurface evaluation across the
GBA, we were pleased to outline our preferred development concept
for delivering the project 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. The facility will be normally manned. The Buchan
wells will be drilled utilising a heavy-duty jack-up (HDJU) rig
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 planned GBA Development
platform. Phase 3 will develop the Verbier West discovery via
connection to the Phase 2 subsea infrastructure.
In June 2021, JOG commenced an offshore survey to support Phase
1 of the GBA Development. The survey has acquired geotechnical and
environmental baseline data along the proposed subsea power cable
route and oil/gas export option routes. This data will be input
into the subsea facilities Front-End Engineering and Design
("FEED") work and support the preparation of the Environmental
Statement, required for the Field Development Plan. The data
acquisition stage of these surveys was completed during August 2021
with analysis of the acquired data ongoing. Vessel availability for
our planned geotechnical survey to acquire soils data over Buchan
was limited due to a poor weather window, and, consequently, JOG
took the decision to re-tender this survey for Spring 2022.
The Buchan location benefits from close proximity to existing
export infrastructure for both oil and gas. Negotiations with
pipeline operators are being conducted in accordance with Oil &
Gas UK's Infrastructure Code of Practice.
A Concept Select Report for the GBA Development was submitted
for approval to the OGA during the period in compliance with JOG's
commitment under the P2498 Licence.
Following JOG's application, the OGA approved its wholly-owned
subsidiary, Jersey Petroleum Ltd, to be appointed as the
Installation Operator for the Design Phase of the planned Buchan
platform. This appointment is significant as it indicates that the
OGA are satisfied that JOG has suitable and sufficient processes in
place to manage the design and specification of the safety and
environmentally critical systems and equipment that will be
incorporated into the new facilities. OSD Installation Operatorship
is necessary in order to submit the Design Notification to the
Offshore Major Accident Regulator in the FEED phase, which in turn
is an important step to the submission of the Safety Case later in
the design process.
Carbon Policy
The energy transition is a central component of JOG's corporate
strategy and, as such, JOG was pleased to introduce its inaugural
Carbon Policy. Through this Carbon Policy, as well as the
strategies and programmes that stem from it, JOG will seek to
position itself as a leading player in energy transition on the
UKCS.
Importantly, JOG is targeting 'Net Zero' emissions from its GBA
Development project at the start of first oil. JOG will seek to
identify Scope 1, Scope 2 and material Scope 3 emissions
(internationally recognised definitions developed by the GHG
(Greenhouse gas) Protocol) and minimise, measure and report Scope 1
and 2 emissions associated with its operations on an absolute
basis.
Overall carbon emissions from the GBA Development with platform
electrification are estimated by management to be <1kg/boe. This
compares to estimated carbon emissions from the GBA Development
using gas turbines of 13kg/boe.
Regional Electrification Opportunities
The GBA is optimally located at the heart of the UK Central
North Sea ("CNS"), such that there is exciting potential for JOG
and its GBA Development to be an integral part of a regional
electrification scheme. JOG is currently involved in discussions in
relation to a regional CNS electrification scheme, which is
building momentum amongst industry parties.
Collaboration with other regional operators could serve to
reduce overall capital costs associated with the cable
infrastructure as well as future operating costs associated with
power prices. Additionally, engagement with infrastructure funders
has indicated that there is potential interest in financing the
capital costs, in return for future tariff payments.
In order to accommodate near-term studies on regional
electrification and potentially align with an area-wide
collaboration scheme, JOG elected to re-phase its FEED entry, FID
(field Investment decision) and first oil milestone dates for the
GBA Development project.
Licensing activity
During the first half of the year, JOG completed its previously
announced corporate acquisition of CIECO V&C (UK) Limited
thereby adding a further 12% working interest in Licence P2170, to
take our ownership to 100% and adding some brought forward tax
losses. We also completed on our successful application in the UKCS
32nd Licensing Round for part block 20/5e which contains an
extension of the J2 oil discovery. This block was subsequently
merged into Licence P2498.
Further to undertaking a comprehensive technical and economic
evaluation of our P2497 (Zermatt) and P2499 (Glenn) licences and
meetings held with the OGA, the OGA confirmed that it was satisfied
that the Phase A Firm Commitments for the licences had been
fulfilled. JOG elected not to progress to the next licence phase,
which would have involved committing to a firm well in each
licence. Accordingly, the licences automatically ceased and
determined at the end of Phase A of their Initial Terms on 29
August 2021.
JOG's Acquisition Strategy
The first half of 2021 ushered in a return of M&A activity
across the UK North Sea, with several sizeable deals announced. Our
primary focus is on securing funding and a partner(s) for our
flagship GBA Development project, but with increased activity and
some motivated sellers, JOG is, nonetheless, reviewing a number of
potential acquisitions and/or opportunties for possible business
combinations.
Financial Review
JOG's cash position was approximately GBP17.1 million as of 30
June 2021. As an oil and gas exploration and development company,
JOG had no production revenue during the year and received only a
small amount of interest on its cash deposits.
The loss for the period, before and after tax, was approximately
GBP2.0m (2020: GBP1.2m). Our main expenditure during the first half
of 2021 related to Concept Select and pre-FEED work on our GBA
Development project.
In March 2021, we were pleased to announce an oversubscribed
equity placing as well as an offer for subscription for existing
shareholders, raising gross proceeds of approximately GBP16.6
million. The net proceeds from the fundraising strengthened the
Company's balance sheet as we launched our farm-out process and are
being utilised to maintain momentum and ensure that time and
funding pressures do not interfere in the efficient delivery of the
overall GBA Development project.
Summary and outlook
The GBA Development project represents a major opportunity in
the UK Central North Sea to extract locally sourced hydrocarbons
profitably and at low-cost, with basin-leading low carbon
emissions. The UK requires responsibly produced hydrocarbons to
support its planned energy transition, as recent industry
underinvestment risks driving prices higher, thereby making energy
less affordable for consumers.
We are excited to seek to bring in the right industry partner(s)
and funding to join us in unlocking the considerable value
potential of the GBA Development. The project is ambitious and will
be a major long-term capital commitment for our industry, and the
rewards and expected rapid payback serve, in our opinion, to make
it a very compelling investment proposition. As we continue to
progress our farm-out discussions, I am particularly grateful to
our shareholders for their ongoing support.
Andrew Benitz
Chief Executive Officer
22 September 2021
JERSEY OIL AND GAS PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2021
6 months 6 months Year to
to to
30/06/21 30/06/20 31/12/20
(unaudited) (unaudited) (audited)
Notes GBP GBP GBP
CONTINUING OPERATIONS
Revenue - - -
Cost of sales 66,403 (45,731) (53,046)
GROSS LOSS 66,403 (45,731) (53,046)
Other gains and (losses) - - (637,028)
Administrative expenses (1,986,483) (1,145,657) (2,111,532)
OPERATING LOSS (1,920,080) (1,191,388) (2,801,606)
Finance income 5 1,127 24,080 27,937
Finance expense 5 (2,788) (1,221) (8,262)
LOSS BEFORE TAX (1,921,741) (1,168,529) (2,781,931)
Tax 6 - - -
LOSS FOR THE PERIOD (1,921,741) (1,168,529) (2,781,931)
OTHER COMPREHENSIVE INCOME - - -
TOTAL COMPREHENSIVE LOSS FOR
THE PERIOD (1,921,741) (1,168,529) (2,781,931)
============ ============ ============
Total comprehensive loss attributable
to:
Owners of the parent (1,921,741) (1,168,529) (2,781,931)
============ ============ ============
Loss per share expressed
in pence per share:
Basic 7 (7.15) (5.35) (12.74)
Diluted 7 (7.15) (5.35) (12.74)
============ ============ ============
The above consolidated statement of comprehensive income should
be read in conjunction with the accompanying notes.
JERSEY OIL AND GAS PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2021
30/06/21 30/06/20 31/12/20
(unaudited) (unaudited) (audited)
Notes GBP GBP GBP
NON-CURRENT ASSETS
Intangible assets
- Exploration costs 8 17,359,856 12,625,032 14,991,295
Property, plant and
equipment 9 57,187 51,243 74,549
Right-of-use assets 10 125,415 269,333 197,374
Deposits 28,420 82,642 82,642
------------- ------------- -------------
17,570,878 13,028,250 15,345,860
------------- ------------- -------------
CURRENT ASSETS
Trade and other receivables 11 593,643 591,134 401,440
Cash and cash equivalents 12 17,056,538 8,881,309 5,081,515
------------- ------------- -------------
17,650,181 9,472,443 5,482,955
------------- ------------- -------------
TOTAL ASSETS 35,221,059 22,500,693 20,828,815
============= ============= =============
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 13 2,566,795 2,466,144 2,466,144
Share premium account 110,358,234 93,851,526 93,851,526
Share options reserve 2,308,462 2,031,994 2,109,969
Accumulated losses (80,431,559) (76,896,417) (78,509,819)
Reorganisation reserve (382,543) (382,543) (382,543)
------------- ------------- -------------
TOTAL EQUITY 34,419,389 21,070,704 19,535,277
------------- ------------- -------------
NON-CURRENT LIABILITIES
Lease liabilities 10 74,200 136,975 101,270
------------- ------------- -------------
74,200 136,975 101,270
------------- ------------- -------------
CURRENT LIABILITIES
Trade and other payables 14 643,419 914,042 1,069,620
Provisions - 200,000 -
Lease liabilities 10 84,051 178,972 122,648
------------- ------------- -------------
727,470 1,293,014 1,192,268
------------- ------------- -------------
TOTAL LIABILITIES 801,670 1,429,989 1,293,538
------------- ------------- -------------
TOTAL EQUITY AND
LIABILITIES 35,221,059 22,500,693 20,828,815
============= ============= =============
The above consolidated statement of financial position should be
read in conjunction with the accompanying notes.
JERSEY OIL & GAS PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2021
Called Share Share Re-
up share premium options Accumulated organisation Total
capital account reserve Losses reserve equity
GBP GBP GBP GBP GBP GBP
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
At 1 January
2020 2,466,144 93,851,526 1,928,099 (75,727,888) (382,543) 22,135,338
Loss for the
period
and total
comprehensive
income - - - (1,168,529) - (1,168,529)
Share based
payments - - - 103,895 - - 103,895
At 30 June 2020 2,466,144 93,851,526 2,031,994 (76,896,417) (382,543) 21,070,704
============= ============= ============= ============== ============== =============
At 1 January
2021 2,466,144 93,851,526 2,109,969 (78,509,819) (382,543) 19,535,277
Loss for the
period
and total
comprehensive
income - - - (1,921,741) - (1,921,741)
Issue of share
capital 100,651 16,506,709 - - - 16,607,360
Share based
payments - - - 198,493 - - 198,493
At 30 June 2021 2,566,795 110,358,235 2,308,462 (80,431,560) (382,543) 34,419,389
============= ============= ============= ============== ============== =============
The following describes the nature and purpose of each reserve
within owners' equity:
Reserve Description and purpose
Called up share capital Represents the nominal value of shares
issued
Share premium account Amount subscribed for share capital in
excess of nominal value
Share options reserve Represents the accumulated balance of
share based payment charges recognised in respect of share options
granted by the Company less transfers to retained deficit in
respect of options exercised or cancelled/lapsed
Accumulated losses Cumulative losses recognised in the
Consolidated Statement of Comprehensive Income
Reorganisation reserve Amounts resulting from the restructuring
of the Group
The above consolidated statement of changes in equity should be
read in conjunction with the accompanying notes
JERSEY OIL AND GAS PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2021
6 months 6 months Year
to to to
30/06/21 30/06/20 31/12/20
(unaudited) (unaudited) (audited)
Notes GBP GBP GBP
CASH FLOWS FROM OPERATING ACTIVITIES
Cash used in operations 15 (2,196,448) (879,953) (2,160,164)
Net interest received 5 1,127 24,080 27,937
Net interest paid 5 (2,788) (1,221) (8,262)
------------- ------------
Net cash used in operating activities (2,198,109) (857,094) (2,140,489)
------------- ------------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on sale of tangible assets - - -
Purchase of intangible assets 8 (2,368,561) (2,532,468) (4,898,731)
Purchase of tangible assets 9 - (47,665) (84,865)
Net cash used in investing activities (2,368,561) (2,580,133) (4,983,596)
------------- ------------------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds of issue of shares 16,607,360 - -
Principal elements of lease payments (65,667) - (112,936)
Net cash generated from financing
activities 16,541,693 - (112,936)
INCREASE/(DECREASE) IN CASH AND
CASH EQUIVALENTS 11,975,023 (3,437,227) (7,237,021)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 5,081,515 12,318,536 12,318,536
------------- ------------------- ------------
CASH AND CASH EQUIVALENTS AT
OF PERIOD 12 17,056,538 8,881,309 5,081,515
============= =================== ============
The above consolidated statement of cash flows should be read in
conjunction with the accompanying notes
JERSEY OIL AND GAS PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2021
1. GENERAL INFORMATION
Jersey Oil and Gas plc (the "Company") and its subsidiaries
(together, "the Group") are involved in the upstream oil and gas
business in the UK.
The Company is a public limited company incorporated and
domiciled in the United Kingdom and quoted on AIM, a market
operated by London Stock Exchange plc. The address of its
registered office is 10 The Triangle, ng2 Business Park,
Nottingham, NG2 1AE.
2. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies adopted are consistent with those
applied in the previous financial year, unless otherwise
stated.
These consolidated interim financial statements have been
prepared under the historic cost convention, using the accounting
policies applied in the Group's statutory financial information for
the year ended 31 December 2020 and in accordance with the
Disclosure and Transparency Rules of the Financial Conduct
Authority and with IAS 34 'Interim financial reporting'. The
condensed interim financial statements should be read in
conjunction with the annual financial statements for the year ended
31 December 2020, which have been prepared in accordance with IFRS
as adopted by the European Union.
Going Concern
The Company is required to have sufficient resources to cover
the expected running costs of the business for a period of at least
12 months after the issue of these financial statements. Further to
completion of the detailed studies in connection with the GBA
Concept Select contracted work programmes, there are currently no
material firm work commitments on any of our licences, other than
ongoing Operator overheads and licence fees. Other work that the
Company is undertaking in respect of the GBA licences and
surrounding areas is modest relative to its current cash reserves.
The Group's current cash reserves, as the principal source of
funding for the Company, are therefore expected to more than exceed
its estimated liabilities. Based on these circumstances, the
Directors have considered it appropriate to adopt the going concern
basis of accounting in preparing its consolidated financial
statements.
The reports for the six months ended 30 June 2021 and 30 June
2020 are unaudited and do not constitute statutory accounts as
defined by the Companies Act 2006. The financial statements for 31
December 2020 have been prepared and delivered to the Registrar of
Companies. The auditors' report on those financial statements was
unqualified. Their report did not contain a statement under section
498 of the Companies Act 2006.
Changes in Accounting Policies and Disclosures
a) New and amended standards adopted by the Company:
At the start of the year the following standards were
adopted:
-- Covid-19-Related Rent Concessions (Amendment to IFRS 16);
-- Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS
9, IAS 39, IFRS 7, IFRS 4 and IFRS 16);
-- IFRS3 conceptual framework amendment;
-- Covid-19-Related Rent Concessions beyond 30 June 2021
(Amendment to IFRS 16);
b) Certain new accounting standards and interpretations have
been published that are not mandatory for 30 June 2021
reporting periods and have not been early adopted by the Group.
These standards are not expected to have a material impact on the
entity in the current or future reporting periods and on
foreseeable future transactions.
The Group's results are not impacted by seasonality.
Significant Accounting Judgements and Estimates
The preparation of the financial statements requires management
to make estimates and assumptions that affect the reported
amounts of revenues, expenses, assets and liabilities at the
date of the financial statements. If in future such estimates
and
assumptions, which are based on management's best judgement at
the date of the financial statements, deviate from the actual
circumstances, the original estimates and assumptions will be
modified as appropriate in the period in which the
circumstances
change. The Group's accounting policies make use of accounting
estimates and judgements in the following areas:
-- The assessment of the existence of impairment triggers
-- The estimation of share-based payment costs
Impairments
The Group tests its capitalised exploration licence costs for
impairment when facts and circumstances suggest that the
carrying
amount exceeds the recoverable amount. The recoverable amounts
of Cash Generating Units are determined based on fair value
less costs of disposal calculations. There were no impairment
triggers in the first half of 2021 and no impairment charge has
been recorded.
Revenue recognition
Revenue is recognised to the extent that it is probable that
economic benefits will flow to the Group and the revenue can be
reliably measured. It is measured at the fair value of
consideration received or receivable for the sale of goods.
Acquisitions, Asset Purchases and Disposals
Acquisitions of oil and gas properties are accounted for under
the purchase method where the acquisitions meet the definition
of
a business combination.
Transactions involving the purchase of an individual field
interest, farm-ins, farm-outs, or acquisitions of exploration and
evaluation licences for which a development decision has not yet
been made that do not qualify as a business combination, are
treated as asset purchases. Accordingly, no goodwill or deferred
tax arises. The purchase consideration is allocated to the assets
and liabilities purchased on an appropriate basis. Proceeds on
disposal (including farm-ins/farm-outs) are applied to the carrying
amount of the specific intangible asset or development and
production assets disposed of and any surplus is recorded as a gain
on disposal in the Consolidated Statement of Comprehensive
Income.
Intangible assets are recognised at acquisition at the cost paid
using the cost accumulation model. Variable payments are not
included in the carrying amount of the asset at acquisition, and no
liability is recognised for the contingent consideration. The Group
does not recognise a liability because, following the IFRIC agenda
decision (March 2016), it is not clear that there is an obligation
before the uncertainty is resolved.
Exploration and Evaluation Costs
The Group accounts for oil and gas exploration and evaluation
costs using IFRS 6 "Exploration for and Evaluation of Mineral
Resources". Such costs are initially capitalised as Intangible
Assets and include payments to acquire the legal right to
explore,
together with the directly related costs of technical services
and studies, seismic acquisition, exploratory drilling and testing.
The
Group only capitalises costs as intangible assets once the legal
right to explore an area has been obtained. The Group assesses the
intangible assets for indicators of impairment at each reporting
date. The Group considers this to be appropriate due to the future
interdependency of these fields.
Potential indicators of impairment include but are not limited
to:
a. the period for which the Group has the right to explore in
the specific area has expired during the period or will expire in
the near future, and is not expected to be renewed.
b. substantive expenditure on further exploration for and
evaluation of oil and gas reserves in the specific area is
neither
budgeted nor planned.
c. exploration for and evaluation of oil and gas reserves in the
specific area have not led to the discovery of commercially viable
quantities of oil and gas reserves and the entity has decided to
discontinue such activities in the specific area.
d. sufficient data exist to indicate that, although a
development in the specific area is likely to proceed, the carrying
amount of the exploration and evaluation asset is unlikely to be
recovered in full from successful development or by sale.
In the event an impairment trigger is identified the Group
performs a full impairment test for the asset under the
requirements of
IAS 36 Impairment of assets. An impairment loss is recognised
for the amount by which the exploration and evaluation assets'
carrying amount exceeds their recoverable amount. The
recoverable amount is the higher of the exploration and evaluation
assets' fair value less costs to sell and their value in use.
Cost of Sales
Within the statement of comprehensive income, costs directly
associated with generating revenue are included in cost of sales.
The Group only capitalises costs as intangible assets once the
legal right to explore an area has been obtained, any costs
incurred prior to the date of acquisition are recognised as cost of
sales within the Statement of Comprehensive Income.
Property, Plant and Equipment
Property, plant and equipment is stated at historic purchase
cost less accumulated depreciation. Asset lives and residual
amounts are reassessed each year. Cost includes the original
purchase price of the asset and the costs attributable to bringing
the asset to its working condition for its intended use.
Depreciation on these assets is calculated on a straight-line
basis as follows:
Computer & office equipment 3 years
Leases
From 1 January 2019, leases are recognised as a right-of-use
asset and a corresponding liability at the date at which the leased
asset is available for use by the Group.
Assets and liabilities arising from a lease are initially
measured on a present value basis. Lease liabilities include the
net present value of the following lease payments:
-- fixed payments (including in-substance fixed payments), less
any lease incentives receivable;
-- variable lease payments that are based on an index or a rate,
initially measured using the index or rate as at the
commencement
date;
-- amounts expected to be payable by the Group under residual
value guarantees;
-- the exercise price of a purchase option if the Group is
reasonably certain to exercise that option; and
-- payments of penalties for terminating the lease, if the lease
term reflects the Group exercising that option.
Lease payments to be made under reasonably certain extension
options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate
implicit in the lease. If that rate cannot be readily determined,
which is generally the case for leases in the Group, the lessee's
incremental borrowing rate is used, being the rate that the
individual lessee would have to pay to borrow the funds necessary
to obtain an asset of similar value to the right-of-use asset in a
similar economic environment with similar terms, security and
conditions.
To determine the incremental borrowing rate, the Group where
possible, uses recent third-party financing received by the
individual lessee as a starting point, adjusted to reflect
changes in financing conditions since third party financing was
received.
Lease payments are allocated between principal and finance cost.
The finance cost is charged to profit or loss over the lease
period to produce a constant periodic rate of interest on the
remaining balance of the liability for each period.
Right-of-use assets are measured at cost comprising the
following:
-- the amount of the initial measurement of lease liability;
-- any lease payments made at or before the commencement date
less any lease incentives received;
-- any initial direct costs; and
-- restoration costs.
Right-of-use assets are generally depreciated over the shorter
of the asset's useful life and the lease term on a straight-line
basis. If the Group is reasonably certain to exercise a purchase
option, the right-of-use asset is depreciated over the underlying
asset's useful life.
Payments associated with short-term leases of equipment and
vehicles and all leases of low-value assets are recognised on a
straight-line basis as an expense in profit or loss. Short-term
leases are leases with a lease term of 12 months or less. Low-value
assets comprise any lease with a value of GBP5,000 or less.
Provisions
Provisions for legal claims, service warranties and make good
obligations are recognised when the group has a present legal or
constructive obligation as a result of past events, it is probable
that an outflow of resources will be required to settle the
obligation, and the amount can be reliably estimated. Provisions
are not recognised for future operating losses. Provisions are
measured at the present value of management's best estimate of the
expenditure required to settle the present obligation at the end of
the reporting period.
Joint Ventures
The Group participates in joint venture agreements with
strategic partners. The Group accounts for its share of assets,
liabilities, income and expenditure of these joint venture
agreements and discloses the details in the appropriate Statement
of Financial Position and Statement of Comprehensive Income
headings in the proportion that relates to the Group per the joint
venture agreement.
Financial instruments
Financial assets and financial liabilities are recognised in the
Group's Statement of Financial Position when the Group becomes
party to the contractual provisions of the instrument. The Group
does not have any derivative financial instruments.
Cash and cash equivalents include cash in hand and deposits held
on call with banks with a maturity of three months or less.
The simplified approach requires expected lifetime losses to be
recognised from initial recognition of the receivables. This
involves determining the expected loss rates using a provision
matrix that is based on the Company's historical default rates
observed over the expected life of the receivable and adjusted
forward-looking estimates. This is then applied to the gross
carrying amount of the receivable to arrive at the loss allowance
for the period.
The three-stage approach assesses impairment based on changes in
credit risk since initial recognition using the past due criterion
and other qualitative indicators such as increase in political
concerns or other macroeconomic factors and the risk of legal
action, sanction or other regulatory penalties that may impair
future financial performance. Financial assets classified as stage
1 have the expected credit losses (ECL) measured as a proportion of
their lifetime ECL that results from possible default events that
can occur within one year, while assets in stage 2 or 3 have their
ECL measured on a lifetime basis. If the borrower has sufficient
accessible highly liquid assets in order to repay the loan if
demanded at the reporting date, the expected credit loss is
considered immaterial.
If the borrower does not have sufficient accessible highly
liquid assets, the ECL is determined by projecting the probability
of default (PD), loss given default (LGD) and exposure at default
(EAD).
The PD is based on default rates determined by external rating
agencies for the counterparties. The LGD is determined based on
management's estimate of expected cash recoveries after considering
the historical pattern of the receivable, and it assesses the
portion of the outstanding receivable that is deemed to be
irrecoverable at the reporting period. For intercompany balances,
the discounted cashflows of the lender are also considered in
calculating the LGD. The EAD is the total amount of outstanding
receivable at the reporting period.
These three components are multiplied together, and adjusted for
forward looking information, such as crude oil prices, to arrive at
a summed ECL in relation to base, optimistic and downturn
scenarios, that carry different probability weightings.
Loss allowances for financial assets measured at amortised cost
are deducted from the gross carrying amount of the related
financial assets and the amount of the loss is recognised in the
statement of comprehensive income.
Trade payables are stated initially at fair value and
subsequently measured at amortised cost.
Foreign Currencies
The functional currency of the Group is Sterling. Monetary
assets and liabilities in foreign currencies are translated into
Sterling at the rates of exchange ruling at the reporting date.
Transactions in foreign currencies are translated into Sterling at
the rate of exchange ruling at the date of the transaction. Gains
and losses arising on retranslation are recognised in the
Consolidated Statement of Comprehensive Income.
Share Capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new
ordinary shares or options are shown in equity as a deduction, net
of tax, from the proceeds.
Share Based Payments
The Group currently has a number of share schemes that give rise
to share-based charges. The charge to operating profit for these
schemes for the period amounted to GBP198,493, (2020: GBP103,895).
For the purposes of calculating the fair value of the share
options, a Black-Scholes option pricing model has been used. Based
on past experience, it has been assumed that options will be
exercised, on average, at the mid-point between vesting and
expiring. The share price volatility used in the calculation is
based on the actual volatility of the Company's shares, since 1
January 2017. The risk-free rate of return is based on the implied
yield available on zero coupon gilts with a term remaining equal to
the expected lifetime of the options at the date of grant.
3. SEGMENTAL REPORTING
The Directors consider that the Group operates in a single
segment, that of oil and gas exploration, appraisal, development
and production, in a single geographical location, the North Sea of
the United Kingdom and do not consider it appropriate to
disaggregate data further from that disclosed.
JERSEY OIL AND GAS PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2021
4. FAIR VALUE OF NON-DERIVATIVE FINANCIAL ASSETS AND FINANCIAL LIABILITIES
Maturity analysis of financial assets and liabilities
Financial Assets
30/06/21 30/06/20 31/12/20
(unaudited) (unaudited) (audited)
------------ ------------ ----------
GBP GBP GBP
Up to 3 months 629,860 635,775 446,082
3 to 6 months 10,704 35,980 35,980
Over 6 months 106,914 271,354 199,395
------------ ------------ ----------
747,478 943,109 681,457
============ ============ ==========
Financial Liabilities
30/06/21 30/06/20 31/12/20
(unaudited) (unaudited) (audited)
GBP GBP GBP
Up to 3 months 683,332 1,173,219 1,116,332
3 to 6 months 13,384 39,633 40,231
Over 6 months 104,954 217,137 136,975
------------ ------------ ----------
801,670 1,429,989 1,293,538
============ ============ ==========
5. NET FINANCE COSTS
30/06/21 30/06/20 31/12/20
(unaudited) (unaudited) (audited)
Interest received: GBP GBP GBP
Interest received 1,127 24,080 27,937
Finance costs (2,788) (1,221) (8,262)
Net Finance income / (costs) (1,661) 22,859 19,675
============ ============ ==========
6. TAX
Jersey Oil and Gas plc is a trading company but no liability to
UK corporation tax arose on the ordinary activities for the period
ended 30 June 2021 due to trading losses. As at 31 December 2020,
the Group held tax losses of approximately GBP46 million (2019:
GBP39 million).
In April 2023 the rate of corporation tax will increase to 25%
as announced in the March 2021 Budget.
7. EARNINGS/(LOSS) PER SHARE
Basic loss per share is calculated by dividing the losses
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
Diluted loss per share is calculated using the weighted average
number of shares adjusted to assume the conversion of all dilutive
potential ordinary shares.
Earnings Weighted
attributable average
to ordinary number Per share
shareholders of shares amount
GBP Pence
Period ended 30 June 2021
Basic and Diluted EPS
Loss attributable to ordinary
shareholders (1,921,741) 26,861,760 (7.15)
============== =========== ==========
JERSEY OIL AND GAS PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2021
8. INTANGIBLE ASSETS
Exploration
Costs
GBP
COST
At 1 January 2021 15,166,536
Additions 2,368,561
At 30 June 2021 17,535,097
============
ACCUMULATED AMORTISATION
At 1 January 2021 175,241
At 30 June 2021 175,241
============
NET BOOK VALUE at 30 June
2021 17,359,856
============
9. PROPERTY, PLANT AND EQUIPMENT
Computer
and office
equipment
GBP
COST
At 1 January 2021 228,447
Additions -
At 30 June 2021 228,447
============
ACCUMULATED AMORTISATION, DEPLETION AND
DEPRECIATION
At 1 January 2021 153,898
Charge for period 17,362
At 30 June 2021 171,260
===========
NET BOOK VALUE at 30 June
2021 57,187
===========
JERSEY OIL AND GAS PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2021
10. LEASES
Amounts Recognised in the Statement of financial position
30/06/21 30/06/20 31/12/20
(unaudited) (unaudited) (audited)
Right-of-use Assets GBP GBP GBP
Buildings 125,415 269,333 197,374
Equipment - - -
Vehicles - - -
Other - - -
------------ ------------ ----------
125,415 269,333 197,374
============ ============ ==========
30/06/21 30/06/20 31/12/20
Lease liabilities (unaudited) (unaudited) (audited)
GBP GBP GBP
Current 84,051 178,972 122,648
Non-Current 74,200 136,975 101,270
------------ ------------ ----------
158,251 315,947 223,918
============ ============ ==========
On adoption of IFRS 16, the Group recognised lease liabilities
in relation to leases which had previously been classified as
'operating leases' under the principles of IAS 17, 'Leases'. These
liabilities were measured at the present value of the remaining
lease payments, discounted using the lessee's incremental borrowing
rate as of 1 January 2019. The weighted average lessee's
incremental borrowing rate applied to the lease liabilities is 3%.
The borrowing rate applied for 2020 and 2021 remains at 3% and the
leases pertain solely to Jersey Oil and Gas's offices in London and
Jersey.
Amounts Recognised in the Statement of comprehensive income
30/06/21 30/06/20 31/12/20
(unaudited) (unaudited) (audited)
GBP GBP GBP
Depreciation charge of right-of-use
asset
Buildings 71,959 63,534 135,493
71,959 63,534 135,493
============ ============ ==========
30/06/21 30/06/20 31/12/20
(unaudited) (unaudited) (audited)
GBP GBP GBP
Interest expenses (included in finance
cost)
Buildings 2,768 4,316 8,230
2,768 4,316 8,230
============ ============ ==========
11. TRADE AND OTHER RECEIVABLES
30/06/21 30/06/20 31/12/20
(unaudited) (unaudited) (audited)
GBP GBP GBP
Other receivables 30 187,514 91,020
Prepayments and accrued income 270,019 194,147 149,309
Deposits 54,222 - -
Value added tax 269,372 209,473 161,111
593,643 591,134 401,440
============ ============ ==========
As at 30 June 2021 there were no trade receivables past due nor
impaired. There are immaterial expected credit losses recognised on
these balances.
JERSEY OIL AND GAS PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2021
12. CASH AND CASH EQUIVALENTS
The amounts disclosed in the consolidated statement of cash
flows in respect of cash and cash equivalents are in respect of
these consolidated statement of financial position amounts:
Period ended 30 June 30/06/21 30/06/20 31/12/20
2021
(unaudited) (unaudited) (audited)
GBP GBP GBP
Cash and cash equivalents 17,056,538 8,881,309 5,081,515
------------ ------------
17,056,538 8,881,309 5,081,515
============ ============ ==========
13. CALLED UP SHARE CAPITAL
30/06/21 30/06/20 31/12/20
(unaudited) (unaudited) (audited)
GBP GBP GBP
Issued and fully paid:
Number: 31,894,293 (2020:
21,829,227)
Ordinary class 2,566,795 2,466,144 2,466,144
2,566,795 2,466,144 2,466,144
============ ============ ==========
14. TRADE AND OTHER PAYABLES
30/06/21 30/06/20 31/12/20
(unaudited) (unaudited) (audited)
GBP GBP GBP
Trade payables 267,385 510,461 451,857
Accrued expenses 303,979 154,814 465,291
Other payables 4 183,486 74,905
Taxation and Social Security 72,051 65,281 77,567
643,419 914,042 1,069,620
============ ============ ==========
JERSEY OIL AND GAS PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2021
15. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
RECONCILIATION OF LOSS BEFORE TAX TO CASH USED IN OPERATIONS
30/06/21 30/06/20 31/12/20
(unaudited) (unaudited) (audited)
GBP GBP GBP
Loss for the period before
tax (1,921,741) (1,168,529) (2,781,931)
Adjusted for:
Amortisation, impairments,
depletion and depreciation 17,362 10,083 23,977
Depreciation right-of-use
asset 71,959 63,534 135,493
Share based payments (net) 198,493 103,895 181,870
Provisions - 200,000 -
Finance costs 2,788 1,221 8,262
Finance income (1,127) (24,080) (27,937)
------------ ------------ ------------
(1,632,266) (813,876) (2,460,266)
Decrease in inventories
(Increase)/decrease in trade
and other receivables (137,980) (385,788) (27,352)
Increase/(decrease) in trade
and other payables (426,202) 319,711 327,454
------------ ------------ ------------
Cash used in operations (2,196,448) (879,953) (2,160,164)
============ ============ ============
16. CONTINGENT LIABILITIES & PROVISIONS
30/06/21 30/06/20 31/12/20
(unaudited) (unaudited) (audited)
GBP GBP GBP
Provisions - 200,000 -
============ ============ ==============
In December 2020 the Company reached a settlement with TGS-Nopec
Geophysical Company ASA ("TGS") pursuant to an agreement entered
into with TGS on 9 February 2018. Under the agreement, TGS claimed
uplift payments from JOG totalling US$1,050,838 in respect of: a)
licence awards to Jersey Petroleum Ltd ("JPL") in the Oil & Gas
Authority's 31st Supplementary Offshore Licencing Round; and b) the
acquisition by JPL of Equinor UK Limited's 70% interest in Licence
P2170 (Verbier). The Company disputed the validity of both claims
and, as a precautionary measure, provisioned GBP200,000 in 2020,
however following which two hearings took place in the Norwegian
courts. Subsequent to these hearings and, on the basis of legal
advice received, the Company agreed a final settlement payment to
TGS of US$850,000 (GBP637,028).
(i) 2015 settlement agreement with the Athena Consortium: In
accordance with a 2015 settlement agreement reached with the Athena
Consortium, although Jersey Petroleum Ltd remains a Licensee in the
joint venture, any past or future liabilities in respect of its
interest can only be satisfied from the Group's share of the
revenue that the Athena Oil Field generates and up to 60 per cent.
of net disposal proceeds or net petroleum profits from the Group's
interest in the P2170 licence which is the only remaining asset
still held that was in the Group at the time of the agreement with
the Athena Consortium who hold security over this asset. Any future
repayments, capped at the unpaid liability associated with the
Athena Oil Field, cannot be calculated with any certainty, and any
remaining liability still in existence once the Athena Oil Field
has been decommissioned will be written off. A payment was made in
2016 to the Athena Consortium in line with this agreement following
the farm-out of P2170 (Verbier) to Equinor and the subsequent
receipt of monies relating to that farm-out.
(ii) Equinor UK Limited: In January 2020, Jersey Oil Limited
announced that it had entered into a conditional Sale and Purchase
Agreement ("SPA") to acquire operatorship of, and an additional 70%
working interest in, Licence P2170 (Blocks 20/5b and 21/1d) from
Equinor UK Limited ("Equinor"), this transaction completed in May
2020. The consideration for the Acquisition consisted of two
milestone payments, which are considered contingent
liabilities:
-- US$3 million upon sanctioning by the UK's Oil & Gas
Authority ("OGA") of a Field Development Plan
("FDP") in respect of the Verbier Field; and
-- US$5 million upon first oil from the Verbier Field.
The earliest of the milestone payments in respect of the
Acquisition is not currently anticipated being payable before the
start of 2022.
(iii) ITOCHU Corporation and Japan Oil, Gas and Metals National
Corporation: In November 2020, Jersey Oil Limited announced that it
had entered into a conditional Sale and Purchase Agreement ("SPA")
to acquire the entire issued share capital of CIECO V&C (UK)
Limited, which was owned by ITOCHU Corporation and Japan Oil, Gas
and Metals National Corporation, this transaction completed in
April 2021. The consideration for the Acquisition included a
completion payment of GBP150k and two future milestone payments,
which are considered contingent liabilities:
-- GBP1.5 million in cash upon consent from the UK's Oil &
Gas Authority ("OGA") for a Field Development Plan ("FDP") in
respect of the Verbier discovery in the Upper Jurassic (J62-J64)
Burns Sandstone reservoir located on Licence P2170; and
-- GBP1 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 Field Development Plan.
The earliest of the milestone payments in respect of the
Acquisition is not currently anticipated being payable before the
start of 2022.
17. RELATED PARTIES
During the period, the Company made loans available to its
wholly owned subsidiaries and received loans from its wholly owned
subidiaries. At the end of the period, Jersey Petroleum Ltd owed
GBP86,409,726 (30 June 2020: GBP80,712,810) to the Company and
Jersey Oil & Gas E&P Ltd owed GBP3,755,742 (30 June 2020:
GBP2,826,957) to the Company. At the end of the period, the Company
owed Jersey North Sea Holdings Ltd GBP211,676 (30 June 2020:
GBP211,676).
During the period, Jersey Oil and Gas PLC charged management
fees to Jersey Petroleum Ltd amounting to GBP1,323,123 (30 June
2020: GBP1,107,008), and Jersey Oil and Gas E&P Ltd charged
management fees to Jersey Petroleum Ltd amounting to GBP447,776 (30
June 2020: GBP487,125).
18. POST BALANCE SHEET EVENTS
Further to undertaking a comprehensive technical and economic
evaluation of licences P2497 and P2499 and meetings recently held
with the OGA, the OGA confirmed that it was satisfied that the
Phase A Firm Commitments for both licences had been fulfilled. JOG
decided not to progress to the next licence phase, which would have
required committing to a firm well in each of these two licence
areas. Accordingly, the licences automatically ceased and
determined at the end of Phase A of their Initial Term on 29 August
2021.
19. AVAILABILITY OF THE INTERIM REPORT 2021
A copy of these results will be made available for inspection at
the Company's registered office during normal business hours on any
weekday. The Company's registered office is at 10 The Triangle, ng2
Business Park, Nottingham, Nottinghamshire NG2 1AE. A copy can also
be downloaded from the Company's website at
www.jerseyoilandgas.com. Jersey Oil and Gas plc is registered in
England and Wales with registration number 7503957.
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END
IR FFLLLFKLZBBL
(END) Dow Jones Newswires
September 22, 2021 02:00 ET (06:00 GMT)
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