Jersey Oil & Gas - Leveraged Returns from North Sea Oil Discovery

• Jersey Oil & Gas is focused on developing the Greater Buchan Area in the UK North Sea, with plans to produce up to 70 million barrels of oil from the Buchan field
• The company has farmed out 80% of Greater Buchan licenses to partners Neo Energy and Serica Energy, retaining 20% equity
• Partners are carrying Jersey’s share of costs to first oil, expected in late 2026, de-risking the investment
• The development plan involves redeploying an existing floating production storage and offloading vessel (FPSO) to keep costs and timeline low
• Jersey is trading at a significant discount to its estimated core NAV, presenting a compelling value opportunity as milestones are achieved

About Jersey Oil & Gas

Jersey Oil & Gas is an independent E&P company focused solely on realizing value from the Greater Buchan Area licences in the UK Central North Sea. Originally founded in 2014, the company acquired the Buchan field and surrounding acreage in 2019. After farming down equity to financially strong partners Neo Energy and Serica Energy, Jersey retains material leverage to value creation while beneficiaries of major cost carries.

Interview with Chief Executive Officer, Andrew Benitz

Redeveloping a Material North Sea Oil Field

Discovered in 1974 and operated by BP for 36 years, the Buchan field produced almost 150 million barrels before being shut-in during 2017. Abandoned due to ageing infrastructure rather than reservoir depletion, Jersey believes up to 70 million barrels of oil remain. The base-case development plan involves drilling five production wells and two water injectors, with pressure support driving recovery above 50%. While not common in the immediate vicinity, the fractured Devonian aged clastic reservoir is a typical North Sea formation.

Deploying Existing Infrastructure

Key to containing costs and minimising timeline is Jersey’s plan to redeploy the Jadestone Energy operated Voyageur FPSO, currently located at the Huntington field over 150km from Buchan. Having commenced operations in 2017, the FPSO has capacity of 60,000 bopd and excellent uptime performance. Relatively minor modifications centre around water handling and power systems, with electrification incorporated to enable future supply from nearby offshore wind projects. First oil is targeted for late 2026.

Farm-outs & Carries Transform Economics

Jersey completed transformational farm-outs to Neo Energy (Operator) and Serica Energy on matching terms. In return for 80% equity, Jersey obtained $38 million of cash payments, full funding of all costs to FDP approval, then a carry on its retained 20% share based on the approved development budget. With low operating costs forecast, Jersey is fully carried until production where it retains upside to $70/bbl oil prices.

Milestones Can Close Discounted Valuation

Jersey is currently trading around a 75% discount to its estimated post-tax core NAV of £250 million, presenting a highly attractive entry point for investors. Near term catalysts include completion of the Zennor farm-out, further de-risking upon FDP approval in H2 2024, then positive progress through development phase activities from 2025. As Jersey achieves tangible milestones on the funded path to production, significant upside exists in closing the valuation disconnect.

Conclusion

With a clear pathway to monetizing a stranded North Sea discovery and funding secured from financially strong partners, Jersey Oil & Gas offers investors leveraged exposure to a material value creation opportunity. The company is carried for 100% of expenditures over the next 18-24 months, allowing shareholders to benefit from derisking milestones without dilution. As Jersey transitions to become a full-cycle E&P business, re-rating towards a justified valuation can drive substantial returns.