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Jersey Oil and Gas Plc tipped for upside as stockbroker eye upcoming farm-out

“We believe that Jersey Oil & Gas will successfully secure a farm-in partner to fund the development of the GBA,” said WH Ireland analyst Brendan Long.

WH Ireland sees huge upside to the () share price as the stockbroker looks to a possible farm-out deal that will propel forward the Greater Buchan Area (GBA) oil field project in the North Sea.

In a note WH Ireland, which acts as broker to Jersey, said it believes the company is progressing the GBA project apace towards first oil by late 2025.

At the same time, WH Ireland repeats an estimate of fair value pitched at 622p – versus a prevailing price of 152p in London.

“We believe that Jersey Oil & Gas will successfully secure a farm-in partner to fund the development of the GBA,” said WH Ireland analyst Brendan Long.

“We premise this opinion on the significant scale of the project, the low-risk nature of the Buchan field (benefiting from 36 years of production data), the materiality of the project’s immediately adjacent discovered satellite fields, running room provided by drill-ready exploration targets, rising commodity prices, the quality of the sub-surface work which benefits from recently acquired high-resolution 3D seismic data, the scarcity of high-quality conventional growth opportunities, the exceptionally high environmental standards of the project (electrification from shore) and the improving balance sheet strength of energy companies.”

“We believe rising crude oil prices have a direct bearing on the attractiveness of the project.”

Earlier today, Jersey announced a milestone in GBA’s progression with the submission of a concept selection report to the UK Oil and Gas Authority.

The company highlighted that the submission marked a significant milestone in delivering maximum value from GBA.

It also told investors that a farm-out process is underway, and, it has seen broad interest and participation from multiple parties.

GBA is planned as a ‘net-zero’ solution – with emissions estimated to be less than 1kg of CO2 per barrel of oil equivalent of production, which is substantially below the North Sea average of 22kg per barrel.

“The submission of the CSR ahead of schedule is testament to the growing project team’s continued hard work,” said Jersey chief executive Andrew Benitz.

Jersey also noted that the project’s ‘supply chain action plan’ was issued to the OGA and it is evaluating export pipeline options. Tendering is underway for the project’s front-end engineering and design (FEED) and an application has been made to the OGA for the company to be appointed an OSD Installation Operator.

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2021-06-02 04:57:00

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