Jersey Oil & Gas (JOG), with its co-venturer, CIECO Exploration and Production (UK) Ltd. (CIECO), have completed the sale and purchase agreement with Statoil for the farm-out of a 70% working interest in UK Seaward License P.2170, Blocks 20/5b and 21/1d in the UK Central North Sea.
In accordance with the terms of the farm-out, JOG and CIECO will receive a cash consideration of US$540,000 from Statoil. The balance of the $1.2 million cash consideration, due to JOG as part of the farm-out agreement, is payable to the company's partners in the Athena asset.
Post completion of the farm-out, Statoil will hold 70% of License P.2170 as operator and will fund all costs up to $25 million in respect of the first exploration well to be drilled. JOG retains an 18% interest, of which 10% will continue to be carried by CIECO, pursuant to the pre-existing arrangements between the parties, and CIECO will retain a 12% interest.
Andrew Benitz, CEO of Jersey Oil & Gas said: "We are delighted to be completing this farm-out to Statoil. The P.2170 Licence area has significant exploration potential for the discovery of oil and we look forward to drilling one of the prospects with our partners, conceivably during 2017."
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Statoil takes over two North Sea blocks