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Jersey Oil and Gas rockets as Statoil completes farm-out

Published: 02:18 07 Oct 2016 AEDT

picture of oil rig
Statoil will pay up to US$25mln for an exploration well

Shares in Jersey Oil & Gas PLC (LON:JOG) rocketed by 45% as it completed the farm-out of two  North Sea blocks to Statoil.

The Norwegian giant is to take a 70% working interest in the UK Seaward Licence P.2170 (Blocks 20/5b and 21/1d) in the UK Central North Sea.

Jersey Oil will receive US$540,000 with the rest of a US$1.2mln cash consideration earmarked for its partners in the initial development.

Under the farm-out deal, Statoil will pay up to US$25mln for a first exploration well on the p.2170 licence.

The project is estimated to host over 500mln barrels of oil in place, across two prospects estimated at 300mln and 212mln barrels each.

Andrew Benitz, Jersey Oil & Gas’s chief executive, said:  “We are delighted to be completing this farm-out to Statoil.

“The P.2170 Licence area has significant exploration potential for the discovery of oil and we look forward to drilling one of the prospects with our partners, conceivably during 2017."

Jersey Oil will retain an 18% stake of which 10% will be carried by CIECO, which holds the other 12%.

Shares rose 20.25p to 65p.

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on 26/4/18