P.2170 Blocks 20/5b & 21/1d (Verbier)
Blocks 20/5b and 21/1d were awarded as a Traditional Licence in the 28th Licensing Round. The blocks lie approximately 100km northeast of Aberdeen, close to the Buchan and Tweedsmuir North and South oilfields and straddle the western end of the North Buchan Trough. On licence award Trap Oil Ltd., a fully owned subsidiary of Jersey Oil and Gas Plc ("JOG") was Operator with a 60 per cent. working interest of which 10.0 per cent. was carried by co-venturer CIECO. A Drill-or-drop election was required by 30th November 2016.
Prospectivity has been identified in the Late Jurassic and the technical studies since award have focused on acquiring reprocessed (PSDM) seismic data, validation of the original mapping and the undertaking of a petroleum charge studies. The completed work programme has improved the prospect definition and allowed for the refinement of volumetric and technical risk estimations.
Further to a farm out campaign undertaken in the early part of 2016, JOG and CIECO completed on the 7th October 2016 a Sale and Purchase Agreement ("SPA") with Statoil (U.K.) Limited ("Statoil"), a leading multinational oil and gas company, for the farm-out to Statoil of, in aggregate, a 70 per cent. working interest and operatorship.
In accordance with the terms of the farm-out, JOG received a cash consideration of US$540,000 from Statoil. The balance of the US$1.2 million cash consideration, due to JOG as part of the farm-out agreement, was paid to the Company's partners in the Athena asset, in accordance with the Company's historical settlement agreement.
Post completion of the Farm-out, Statoil will fund all costs up to US$25 million in respect of the first exploration well to be drilled. The Company retains an 18 per cent. interest, of which 10 per cent. will continue to be carried by CIECO, pursuant to the pre-existing arrangements between the parties, and CIECO retains a 12 per cent. interest.
Subsequently, Statoil confirmed to the OGA that a well to test the Verbier prospect will be drilled in 2017. Both JOG and CIECO have confirmed participation in the well. A site survey was acquired during October -November 2016 and well planning is underway.
On 27th March 2017, JOG announced an independent assessment of resource estimates in relation to UK Seaward Licence P.2170, Blocks 20/5b & 21/1d has been completed by ERC Equipoise Ltd ("ERCE").
· Mean Prospective Resources attributed to Licence P.2170 for the Verbier prospect increased to 162 Million barrels of oil equivalent ("MMboe") from 118 MMboe and the chance of success increased to 29% from 26%
· Contingent Resources relating to discovery well 20/5a-10Y identified
· Mean Prospective Resources for the Cortina prospect increased to 124 MMboe from 91 MMboe with a chance of success of 19%
On the 4th April JOG announced that Statoil has awarded a contract to Transocean Drilling UK Limited ("Transocean") for the semisubmersible rig Transocean Spitsbergen. The Transocean Spitsbergen rig will drill the Verbier prospect as part of a Statoil operated three well drilling programme, with the Verbier well planned to be drilled in summer 2017.
On the 14th August JOG announced that drilling operations have commenced on the Verbier prospect with the drilling programme including a provision for the drilling of a sidetrack well, dependent on the results of the initial well, expected to take up to 70 days.
On the 11th September JOG announced that the Statoil operated 20/05b-13 exploration well drilled to test the Verbier prospect had been safely drilled, reaching the planned target Total Depth of 4,267m on 10 September 2017. The well encountered water bearing Upper Jurassic sands, deeper than anticipated. A decision on whether to drill a sidetrack would be taken after evaluation of wireline logs, although at the time JOG considered this to be unlikely. In the event a sidetrack was not drilled, the well will be plugged and abandoned.
On the 18th September JOG announced that, further to the Company's announcement of 11 September 2017, the wireline log data from the initial exploration well, received late on 12 September 2017, had been evaluated by the P.2170 Joint Venture partnership led by the operator Statoil (U.K.) Limited ("Statoil"). Indications of the potential for hydrocarbons to be present in a smaller accumulation up dip of the 20/05b-13 Verbier exploration well could not be ruled out. Accordingly, agreement was reached by the P.2170 Joint Venture partners to target this resource with a sidetrack exploration well.