Mining, Oil & Gas News & Blog
04

Andrew Benitz told Proactive Investors the firm was well positioned to build a "sizeable company going forward".

He says the hard work undertaken and its knowledge now of the North Sea market, means the firm is in a good position to make a transaction and evaluate assets.

"There hasn't been a huge amount of successful transactions partly because of low oil prices in the first part of the year, but secondly, vendors have had to get used to the new environment.,” he said.
But Benitz thinks with range bound oil between US$40 and US$50 a barrel , there is a "growing appetite" for increasing acquistions and disposals across the North Sea, he suggests.

Big news for the firm recently has been the successful farmout to Norwegian oil major Statoil on the P.2170 licence, in which the latter will take a 70% stake and be operator. "That was a great achievement for us," said Benitz, who added it was s a very promising prospect, with the larger of the two targets, having 300mln barrel potential.

In its interims, the AIM firm said work was currently focused on obtaining the customary regulatory approvals to complete the farm-out.
It also told investors it continues to “work actively” on a number of opportunities in the UK, which it expects will lead to the acquisition of producing oil and gas assets in the near future.

The summer saw the group it strike a farmout deal with Norwegian major and North Sea expert Statoil over exploration licence P.2170 licence, so that drilling a well there can start next year.- a deal, which Graham Wood (Analyst) described as impressive.

This is a promising prospect (P.2170), with the larger of the two targets, having 300mln barrel potential, the firm has said.

Wood said: "Statoil is without doubt the preferred partner in the North Sea....... the size they are and the fact they're able to produce long term profile assets and pick out areas, which are in inherently cheap works very well with a much smaller company like Jersey Oil & Gas."

He notes that majors like Shell and BG are generally moving away from the North Sea, apart from where there are particularly large prospects, meaning they are selling, providing opportunities for smaller firms.

Firms like Jersey are looking at developing such assets at much lower costs, says Wood, around US$20 a barrel opex costs, and with Brent crude staying a high US$40, it’s looking like a profitable model, he points out.

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