Jersey Oil & Gas – shares lift 23% on GBA ‘farm-out’ news
The big news today for shareholders in Jersey Oil & Gas (LON:JOG) is that it is at an advanced stage in agreeing to farm-out a material interest in its Greater Buchan Area.
It has lit up the group’s shares, which have jumped 23% on the news, to around 188p.
Jersey Oil & Gas is a UK exploration and production company which is focused on building an upstream oil and gas business in the North Sea.
It holds a significant acreage position within the Central North Sea referred to as the Greater Buchan Area, which includes operatorship and 100% working interests in blocks that contain the Buchan oil field and J2 oil discovery and an 100% working interest in the P2170 Licence Blocks 20/5b & 21/1d, that contain the Verbier oil discovery and other exploration prospects.
This positive news, which could see finalisation by the end of April, could also see an interest being taken in the company’s surrounding exploration assets.
The other party has not as yet been named.
Brokers very keen
Analyst Daniel Slater at Zeus Capital has a very positive outlook on the group’s prospects and upon his company’s total risked net asset value has a massive 856p price objective.
Analyst Brendan Long at WH Ireland believes that it is ‘game on’ for the energy crisis and that the timing in respect of the commodity price cycle is excellent for both the counter party and Jersey Oil & Gas. He is also very positive about the news.
At finnCap their analyst Jonathan Wright considers that even under his conservative assumptions on the group’s prospects that there is a significant upside potential for the group’s shares from a successful deal. He has a risked valuation of 660p a share.
CEO Andrew Benitz stated that:
"We are pleased to be in advanced exclusive negotiations with a well-funded industry heavyweight and whilst there can be no guarantees of a successful conclusion, we are aiming to finalise the farm-out in the near future and look forward to updating shareholders shortly."