Jersey Oil & Gas, an independent upstream oil and gas company ?focused on the UK Continental Shelf ("UKCS") region of the North Sea, is pleased to announce that it has entered into a conditional sale and purchase agreement ("SPA") to acquire the entire issued share capital of CIECO V&C (UK) Limited ("CIECO V&C"), which is currently owned by ITOCHU Corporation ("ITOCHU") and Japan Oil, Gas and Metals National Corporation ("JOGMEC") (the "Acquisition").
- Acquisition secures an additional 12% working interest in Licence P2170 Blocks 20/5b & 21/1d ("Licence P2170") (the "Licence Interest") thereby providing JOG with 100% ownership and full control of Licence P2170, located within JOG's Greater Buchan Area ("GBA") development project
o CIECO V&C's sole portfolio asset is the Licence Interest
- Increases JOG's ownership of the Verbier oil discovery, the majority of which sits within Licence P2170
- Increases ownership of multiple high-impact exploration opportunities within Licence P2170, including three drill-ready prospects: Verbier Deep, Wengen and Cortina
- Simplifies licence ownership ahead of the planned GBA farm-out process
- CIECO V&C has approximately £15 million of tax losses which are expected to provide additional value to JOG following first oil
Principal Acquisition Terms:
- A completion payment of £150,000 in cash
- Contingent payments of:
o £1.5 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
o £1 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 FDP
Completion of the Acquisition is subject to OGA approval. The Acquisition is also contingent on ITOCHU acquiring JOGMEC's shares in CIECO V&C ahead of completion, the timing for which is anticipated to coincide with the OGA's approval process.
Further information on CIECO V&C pursuant to AIM Rule 12:
For its latest financial year to 31 December 2019, CIECO V&C had no revenues and recorded a loss before tax of £13.6 million. CIECO V&C is being acquired on a cash free and debt free basis.
Andrew Benitz, CEO of JOG, commented:
"The corporate acquisition of CIECO V&C completes 100% ownership of the final component of our GBA project that was not previously wholly owned by JOG and positions us perfectly ahead of completion of Concept Select and the planned launch of JOG's wider GBA sales process.
"This Acquisition increases JOG's discovered resources, adds material value and exploration upside in addition to useful tax losses.
"We are grateful to the CIECO V&C team for the valuable contributions they have made during our partnership on Licence P2170, which led to the Verbier oil discovery in 2017 and we wish them well with their future endeavours."