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Jersey Oil & Gas Swings To Loss; Verbier Still Commercially Viable

LONDON (Alliance News) - Jersey Oil & Gas PLC on Monday said it swung to a loss from a profit in ...

Alliance News 20 May, 2019 | 12:02PM
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LONDON (Alliance News) - Jersey Oil & Gas PLC on Monday said it swung to a loss from a profit in 2018 after sizeable reimbursements from co-venturers the year before, but its still views its Verbier project as commercially viable.

Shares in Jersey Oil & Gas were up 14% at 63.35 pence in late morning trade in London.

The upsteam oil and gas firm, which has interests in the UK continental shelf region of the North Sea, posted an annual pretax loss in 2018 of GBP2.0 million, reversing its GBP726,692 profit in 2017.

This swing to a loss was the result of Jersey Oil & Gas receiving only GBP12,037 of carried cost reimbursements from co-venturers in 2018, a minute fraction of the GBP2.4 million worth of reimbursements recorded in 2017.

Administrative expenses shrank to GBP1.4 million from GBP1.7 million. The company also ended 2018 with GBP19.8 million of cash, and intends to use between GBP4 million and GBP5 million through the first half of 2019 in order to settle costs from an appraisal well at Verbier, which is on the UK continental shelf region in the North Sea.

Delivery of a final 3D seismic survey dataset from the company's Verbier project, in which Jersey Oil & Gas holds an 18% interest, is expected near the end of the second quarter of 2019 and the company intends to undertake a technical re-evaluation of the licence area before deciding on any future appraisal or exploration programme.

The re-evaluation follows Verbier appraisal well that did no encounter Upper Jurassic reservoir sands as expected. The company does expect is contingent resource estimates will be revised toward the lower end of its initial estimate of 25 million barrels of oil equivalent, which Jersey Oil & Gas sees as commercially viable.

Furthermore, a large part of the mapped area of Verbier is still untested and a deeper horizon has been identified, Jersey Oil & Gas noted.

The company also is expecting positive results from a supplementary offshore licencing round, which it expects will benefit the Verbier discovery.

Jersey Oil & Gas "continues to benefit from our initial Verbier oil discovery announced in 2017, notwithstanding the recent appraisal well results. We look forward to delivery of the new 3D seismic data and working with our co-venturers on assessing potential future appraisal and exploration drilling opportunities on the licence area. Additionally, we are excited by the potential for a new area hub catalysed by the 31st supplementary offshore licensing round and the positive impact we believe this will have for Verbier," said Chair Andrew Benitz.

"The company benefits from a strong funding position and we are optimistic that we can create value for shareholders through our core asset base, with multiple catalysts that exist for the company through the remainder of 2019," Benitz added.

By Anna Farley; annafarley@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Jersey Oil and Gas PLC 221.15 GBX 1.68 -

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