Jersey Oil & Gas, an independent upstream oil and gas company ‎focused on the UK Continental Shelf region of the North Sea, today announced its unaudited Interim Results for the six month period ended 30 June 2024.

Highlights

• Significant progress has been made across all engineering, subsurface and regulatory workstreams to position the Buchan Horst ("Buchan") project for formal approval
• The Company has been fully carried for its share of the £22 million that has been spent to date on the current phase of activities by the Buchan joint venture as a result of the farm-out agreements with NEO Energy ("NEO") and Serica Energy ("Serica")
• Multiple regulatory submissions have been made as part of moving towards Field Development Plan ("FDP") approval - a draft FDP to the North Sea Transition Authority, an Environmental Impact Assessment to the Offshore Major Accident Regulator and a "Relocation Notice" to the Health & Safety Executive concerning the floating production, storage and offloading vessel
• As at 30 June 2024, the Company had a cash balance of approximately £13 million and no debt.  This reflects £5.5 million received during the first half of the year as a result of completing the Greater Buchan Area farm-out transaction with Serica
• The Company benefits from no financial exposure to its 20% share of the Buchan project's costs as a result of the farm-outs that have been completed with NEO and Serica
• Whilst clarity is awaited on the fiscal and regulatory uncertainties currently facing the UK's oil and gas industry, work on the project is being slowed down by the Buchan Operator and a licence extension is being requested
• Actions are being taken to further reduce the cash costs of the business in the near term ahead of Buchan FDP approval.  Through various measures, including a reduction in salaries, staff and Director numbers, the cash costs of the business are forecast to fall by 50% from £3 million a year to under £1.5 million in 2025
• While the Company continues to seek compelling M&A opportunities that could bring cash flow, portfolio diversification and quality investment opportunities into the business, it is now looking through a wider lens than the historic focus on purely UK oil and gas assets

Andrew Benitz, CEO of Jersey Oil & Gas, commented:
"The first half of the year has been marked by both highs and lows for the Company.  In February 2024, we celebrated completion of our second GBA farm-out transaction to Serica Energy.  Critically, this enabled us to secure a fully funded 20% interest in the Buchan development project.  This achievement was testament to the quality of the asset we have nurtured from inception and to the expertise and tenacity of the team. 

The high of this farm-out success has been tempered over the course of the year by the fiscal and political turmoil the UK oil and gas industry has faced.  Whilst demand for hydrocarbons continues during the energy transition, developing homegrown energy provides the UK with a cleaner and more secure solution than relying on carbon intensive imported fuels. The Buchan project has the potential to create over 1,000 jobs across many parts of the UK supply chain and over 200 project related jobs, attract private investment of around £1 billion into the UK economy, generate hundreds of millions in UK tax revenues and deliver accelerated investment in new offshore renewable electricity generation.

Against that backdrop, we hope that the Government will ensure that sense prevails and the right fiscal and regulatory environment is established to enable the UK's oil and gas industry to continue being a highly valuable contributor to the economy for years to come, whilst we transition to a lower carbon economy."

KeyFacts Energy: Jersey Oil and Gas UK country profile