Jersey Oil & Gas (AIM:JOG) - Fully Funded to Unlock 70 Million Barrel North Sea Oil Discovery

Interview with Andrew Benitz, CEO of Jersey Oil & Gas PLCRecording date: 12th February 2024Jersey Oil & Gas has firmly transitioned its Greater Buchan Area licenses into a funded and de-risked staged development. Having proven an optimal concept through engineering studies, the company has attracted capable partners to fund activities through to first oil. With full funding secured against only 20% equity, Jersey offers investors asymmetric risk-reward in realizing tremendous stranded value.During 2021 and 2022, Jersey Oil & Gas attracted North Sea heavyweights Neo Energy and Serica Energy to participate in the Greater Buchan Area redevelopment. On matching terms, the partners will fund 100% of costs including Jersey’s 20% share in return for an 80% licence stake. Cash payments to Jersey total $38 million, providing a strong balance sheet into the funded phases ahead. Partners were selected based on financial strength, strategic alignment and operational capability.The base case involves redeploying the Jadestone Energy operated Voyageur FPSO, requiring only minor modifications before being positioned over existing Buchan wells. First oil remains on target for late 2026 based on only modest facilities workscope. The development base case comprises five production wells and two water injectors, with pressure support from underlying aquifers expected to boost recovery above 50% of oil in place. Significantly enhancing economics, operating costs are forecast below $15/bbl.Partners are fully funding a comprehensive FEED study currently underway, together with all activities through to FDP approval in 2024. Based on the approved development budget, Jersey’s 20% equity share will also be fully carried through the construction and commissioning phase. With no further funding required, Jersey shareholders are fully leveraged to benefit from significant value catalysts in the years ahead. Jersey’s market capitalisation stands at only 25% of its estimated post-tax core NAV.Key upcoming catalysts centre around FDP approval, then demonstration of consistent progress through the funded development phase. First oil remains targeted for 2026, whereafter Jersey transforms into a cash generative oil producer. Event-driven rerating of Jersey’s valuation upside should occur as de-risking continues on the pathway to production. For investors, the risk-reward asymmetry in entering at the current valuation is uniquely compelling.In summary, Jersey has positioned itself for funded success from a stranded North Sea discovery. Future newsflow offers shareholders multiple opportunities to benefit from substantial incremental value creation. The company represents a high confidence value opportunity underpinned by committed partners and a fully financed work program.—View Jersey Oil & Gas company profile: https://www.cruxinvestor.com/companies/jersey-oil-and-gas-plcSign up for Crux Investor: https://cruxinvestor.com

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