TIDMJOG
RNS Number : 4974A
Jersey Oil and Gas PLC
02 June 2021
2 June 2021
Jersey Oil and Gas plc
("Jersey Oil & Gas", "JOG" or the "Company")
Greater Buchan Area Development Project
Operational Update
Jersey Oil & Gas (AIM: JOG), an independent upstream oil and
gas company focused on the UK Continental Shelf ("UKCS") region of
the North Sea, is pleased to provide an operational update in
respect of its Greater Buchan Area ("GBA") Development Project.
Highlights
-- Subsurface evaluations and independent peer review of
subsurface and facilities concept select scopes completed
-- Concept Select Report ("CSR") issued to the UK Oil and Gas Authority ("OGA")
o As outlined in the report, the preferred GBA development
concept is for a fully electrified Net-Zero solution, estimated to
emit carbon at a rate of less than 1kg of CO(2) per barrel of oil
equivalent ("boe") produced, significantly below the North Sea
average of approximately 22kg of CO(2) /boe
-- 'Supply Chain Action Plan' issued to the OGA
-- Evaluation of export pipeline options underway
-- In line with the strategy to electrify the GBA development,
applications for UK electricity grid connection submitted and
pipeline & subsea electricity cable survey contract awarded
o In addition to being economically attractive to electrify the
planned Buchan platform, the installation of a subsea electricity
cable has the potential to facilitate the electrification of other
nearby platforms, with collaboration efforts ongoing
-- Front-End Engineering and Design ("FEED") tendering ongoing
-- Application made to the OGA to be appointed OSD Installation Operator
-- Farmout process underway with broad interest and participation from multiple parties
Andrew Benitz, CEO of Jersey Oil & Gas, commented :
"The submission of the Concept Select Report to the OGA
represents a significant milestone for JOG in our journey to
deliver maximum value from the Greater Buchan Area.
"Our chosen development concept ensures that, through
electrification, the GBA Development could produce less than 1kg of
CO(2) per barrel produced; fully aligned with the UK's "Net-Zero"
targets. The submission of the CSR ahead of schedule is testament
to the growing project team's continued hard work."
Concept Select Report
As detailed in JOG's announcement of 3 March 2020, subsurface
and facilities evaluation of concept options is complete. All
aspects of the work have been independently peer reviewed by Vysus
Group, with concept cost estimates and delivery schedules
benchmarked by PCP Ltd.
The selected concept for the GBA development is planned to be
executed in three phases:
-- Phase 1 will deliver a single integrated wellhead,
production, utilities and quarters (WPUQ) Platform located at the
Buchan field. Production from the reservoirs will be supported by
injection of both produced water and seawater and down-hole
electric pumps (ESPs). The facility will be normally manned. The
Buchan wells will be drilled utilising a heavy-duty jack-up (HDJU)
located over a 12 slot well bay. The Phase 1 facilities will be
designed to accommodate Phase 2 and Phase 3 of the development.
-- Phase 2 will develop the J2 West, J2 East and Verbier East
discoveries via a subsea tie-back to the GBA platform.
-- Phase 3 will develop the Verbier West discovery, via
connection to the Phase 2 subsea infrastructure.
The CSR, summarising the Company's findings from the 'Select'
phase, has been finalised and submitted to the OGA ahead of the 31
July 2021 P2498 licence commitment date for submission.
Supply Chain Action Plan
A 'Supply Chain Action Plan' ("SCAP") has been submitted to the
OGA, detailing contract strategies and supply chain engagement
plans for the GBA Phase 1 Development. The SCAP details JOG's aim
to establish an open and honest relationship with all contractors
and suppliers, delivering a procurement and supply chain management
system that is responsible, ethical and professional. In line with
this approach, JOG is now a signatory to the Department for
Business, Energy & Industrial Strategy's Prompt Payment Code
("PPC"). The PPC is a voluntary code of practice which sets
standards for payment practices within the supply chain. JOG is
committed to meeting the objectives of the PPC, as well as
encouraging its current and future suppliers to also become
signatories to the code.
Export Option Evaluation
The Buchan location benefits from close proximity to existing
export infrastructure for both oil and gas. In February 2021, JOG
issued formal requests for service to several infrastructure
owners, in accordance with Oil & Gas UK's Infrastructure Code
of Practice. Indicative offers have now been received and are
subject to a detailed economic and technical assessment by the
Project team. This work is scheduled to be completed to inform
FEED.
Electrification
In line with the UK Government's "Net-Zero" policies, JOG
recognises the need for a low carbon power solution and has an
aspiration to deliver production from the GBA Development Project
at an industry-leading carbon intensity level. Accordingly, and in
line with the Company's recently announced Corporate Carbon Policy,
the CSR proposes a development powered through the provision of a
UK national grid connection via the installation of a subsea cable
to shore. This "Net-Zero" solution for the GBA Development Project
is economically attractive, with overall carbon emissions from the
GBA with platform electrification estimated to be less than
1kg/boe.
Accordingly, formal applications for a power supply connection
have been submitted to both National Grid and Scottish Hydro
Electric Transmission.
The Board believes the GBA is optimally located in the heart of
the UK Central North Sea such that there is exciting potential for
JOG to be an enabler for regional electrification. Collaboration
with other regional operators could reduce overall capital costs
associated with the subsea cable infrastructure. The Company
continues to progress collaboration opportunities that may
ultimately lead to a reduction in the cost of the electrification
infrastructure.
Offshore Surveys
JOG plans to conduct a series of offshore surveys in Q2 and Q3
2021 to support phase 1 of the GBA development. A contract has been
awarded for the acquisition of geotechnical and environmental
baseline data along the subsea power cable route and oil/gas export
option routes. The acquired data from the route surveys will input
into the subsea facilities FEED basis of design and support
development of the Environmental Statement, required for the Field
Development Plan . In addition, a geotechnical survey is planned at
the Buchan location to acquire soils data to inform the design of
the GBA Platform substructure, with tenders under evaluation.
Define Phase Preparation
Tendering processes for the provision of FEED engineering
services were commenced at the end of Q1 2021. Separate tenders for
the provision of engineering services for topsides and substructure
have been received and are now subject to ongoing technical and
commercial evaluation. Invitations to tender have also been issued
for the provision of subsea engineering services and well
engineering services. Tenders are due to be received for these
scopes of work by the end of June 2021. Application made to the OGA
to be appointed OSD Installation Operator.
GBA Farmout Process
The GBA farmout process, which was launched in March 2021, has
received broad interest and participation from multiple parties.
With the diligence process ongoing it is premature to comment
further on the process at this stage.
Next Steps
Activities to support the decision gate for progression into the
'Define' phase of the GBA Project are on schedule, with review
expected to take place in Q3 2021.
Enquiries :
Jersey Oil and Gas plc Andrew Benitz, CEO C/o Camarco:
Tel: 020 3757 4983
Strand Hanson Limited James Harris Tel: 020 7409 3494
Matthew Chandler
James Bellman
Arden Partners plc Paul Shackleton Tel: 020 7614 5900
Benjamin Cryer
finnCap Ltd Christopher Raggett Tel: 020 7220 0500
Tim Redfern
Camarco Billy Clegg Tel: 020 3757 4983
James Crothers
Notes to Editors :
Jersey Oil & Gas is a UK E&P company focused on building
an upstream oil and gas business in the North Sea. The Company
holds a significant acreage position within the Central North Sea
referred to as the Greater Buchan Area ("GBA"), which includes
operatorship and 100% working interests in blocks that contain the
Buchan oil field and J2 and Glenn oil discoveries and an 100%
working interest in the P2170 Licence Blocks 20/5b & 21/1d,
that contain the Verbier oil discovery and other exploration
prospects.
JOG's total GBA acreage is estimated by management to contain
190 million barrels of oil equivalent ("mmboe") of discovered P50
recoverable resources net to JOG, in addition to significant
exploration upside potential of approximately 220 mmboe of
prospective resources in close proximity to the Company's planned
Buchan platform. JOG has recently concluded the Concept Select
phase of an FDP for the Greater Buchan Area and plans to progress
into Front End Engineering and Design (FEED) later this year.
JOG is focused on delivering shareholder value and growth
through creative deal-making, operational success and licensing
rounds. Its management is convinced that opportunity exists within
the UK North Sea to deliver on this strategy and the Company has a
solid track-record of tangible success.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018.
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