Menu
Close

Jersey Oil and Gas - North Sea Oil

lse:jog

#11

I think when AB said there are “multiple catalysts” in the remainder of 2019, it means we are going to get lots of news flow…this from the results statement.

https://www.investegate.co.uk/jersey-oil---38--gas-plc--jog-/rns/final-results-for-the-year-ended-31-december-2018/201905200700204835Z/

Andrew Benitz, CEO of Jersey Oil & Gas, commented:

"JOG continues to benefit from our initial Verbier oil discovery announced in 2017, notwithstanding the recent appraisal well results. We look forward to delivery of the new 3D seismic data and working with our co-venturers on assessing potential future appraisal and exploration drilling opportunities on the licence area. Additionally, we are excited by the potential for a new area hub catalysed by the 31st Supplementary Offshore Licensing Round and the positive impact we believe this will have for Verbier.

"The Company benefits from a strong funding position and we are optimistic that we can create value for shareholders through our core asset base, with multiple catalysts that exist for the Company through the remainder of 2019."

.


#12

Worth re-reading these articles discussing the Greater Buchan Area when it was up for grabs. This is the exciting opportunity which can be put into production with tie backs to existing pipelines…which JOG was awarded.

.


#13

I largely agree with everything you say, Pro_S. One point I would make, however, is that the cash value of the losses is the tax rate that applies when the losses are used to reduce future taxes. At present the tax rate in the UK for oilcos is 30%, so £25m of losses are worth £7.5m, not the gross figure of £25m.

JOG’s SP is so far below what anyone with any ability to understand fundamentals would say it should be that what the tax losses are worth is immaterial.

imo JOG is only at the starting line.

rgds

dick


#14

Indeed.

Write up on JOG. PDF file in the link below.

https://www.atlanticmarkets.co.uk/download/232/Report?

.


#15

Some useful links re-posted :

OGA announcement and links to GBA downloads:

https://www.ogauthority.co.uk/news-publications/news/2019/supplementary-31st-round-offers-exceptional-opportunity-for-greater-buchan-area-revival/

PGS announcing they have good 3D over the whole GBA and its available:

Wood-Mac write up on the GBA potential pre-award:

AC write up of JOG post GBA award:

https://www.atlanticmarkets.co.uk/download/232/Report

Simon Thompson (IC) write up on JOG early July:

29th July further comment by ST at the Investors Chronicle:

.


#16

Just to give some figures for reference.

The House Broker believes :

Current cash level is 15m GBP.

JOG to end 2019 with 10m GBP cash.

Unrisked NAV is 2462 pence per share - reducing to 1231 pence per share when Equinor take their 50% (current share price only just over 200 pence per share)

Risked NAV of 1074 pence per share - reducing to 537 pence a share when Equinor take their 50%.

JOG have the funds for the FDP and also a well on p2170 in 2020. Drilling plans for 2020 should be known by end of 2019.

CPR will be coming in Q4 2019.

In effect, what I take, keep on accumulating JOG shares and when Equinor exercise their option in the coming months the share price should move up much closer to the Risked NAV of 537 pence a share post Equinor option.

Q4 will see the CPR released and also drilling plans for 2020 and so Q4 should also see a significant uplift to the Risked NAV from 537p up to ??? and so the share price should rise as well with that.

Basically, anything below 300p should see a decent profit when Equinor take the option in a month or two and should rise further come Q4 and the CPR/drilling plans.

Broker current target price pre-Equinor taking their option is 450p.


#17

If anyone wants to download and read the Arden Partners note on (Jersey Oil and Gas) JOG then you can in the link below:

.


#18

https://www.investegate.co.uk/jersey-oil---38--gas-plc--jog-/rns/31st-supplementary-offshore-licensing-round/201908230700069994J/

Another 14 MMBO to JOG.

JOG now has 123.5 MMBO of proven recoverable oil.

(ECO has less than 40MMBO by the way…compare the market caps)

.


#19

Nice post on LSE… someones summary of JOG. I would agree that ultimately JOG will be 1000p before too many moons pass, it will come in stages and reward those who keep holding and wait :

RE: Time for some simple maths.Today 08:12

I get your gist PC01, but not your maths :slight_smile:

I work on a conservative value of $7 per barrel. This is an estimated selling price achievable for discovered resources in the ground pre-infrastructure spend, in an area of the NS that’s close to the Forties Pipeline for tie-back purposes (recent evidence is there to support this price - higher actually).

JOG has 18% of Verbier’s minimum of 25m barrels, which is 4.5mmboe. Add to that the 52.5mmboe (net of likely transfer to Equinor) in Buchan & J2 and this gets us to 57mmboe (ie 57 million barrels of oil equivalent -‘oil’ - in simple terms). Today’s addition takes us to 71mmboe.

71mmboe alone (ignoring the value of hundreds of millions of barrels of prospective resources across JOG’s five contiguous licences) gives us a value of $497m - say $500m. I don’t really see a reason to discount the $7pb but, even if one did, it would still leave a value of the discovered resources alone of $250m - or £200m using a $/£ rate of 1.25.

This is £9.16 per share (I think much higher because I wouldn’t discount my $7pb by 50%). Throw in 84p for the rest of what JOG has (not least extremely talented and committed management and staff) as we’re being ultra conservative - and £12m of cash, plus the prospective resources referred to above, and say £10 a share. I’m doubtful the directors would entertain a bid at that level.

One day the penny will drop

dyor


#20

Jersey claims 120m barrel Buchan opportunity after latest block award

by Mark Lammey
23/08/2019, 7:00 am

Jersey Oil and Gas has taken the next step in its mission to amass a major resource base in the outer Moray Firth after clinching the block containing the Glenn discovery.

Block 21/2a is an additional award from the Oil and Gas Authority’s 31st supplementary licensing round, which focused on the Greater Buchan Area.

London-listed Jersey previously announced that it had been handed acreage containing the Buchan and J2 discoveries during that bidding round.

At the time, Jersey described those awards as the “most significant event since its inception”, while the firm’s shares skyrocketed.

The assets are in the same vicinity as licence P2170 containing the Verbier discovery, in which Jersey holds an 18% stake.

Equinor-operated Verbier underwhelmed in April when an exploration well showed the field contained closer to 25 million barrels of oil, not the 130m barrels partners had hoped for.

Jersey said today that the addition of Glenn to its existing Greater Buchan acreage provided an opportunity to develop a major new area capable of producing 120m barrels of oil equivalent net.

Chief executive Andrew Benitz said: “We are delighted to announce this further licence award within the Greater Buchan Area.

“This additional acreage completes a 100% success rate of awards across all of the acreage we applied for in the 31st supplementary offshore licensing round.

“The Glenn oil discovery contained therein adds additional discovered resources net to Jersey as well as operatorship of another discovered resource in the area of our Buchan-centred development hub plans for the GBA.”


#21

Arden have increased their Target Price for JOG to 550p a share from 450p a share following this extra license award.

They assumed that the newly awarded license will also see JOG give 50% to Equinor and so included just 50% of the new license into their NAV modelling.

Anyway, their new NAV are :

Risked NAV now 597p a share and unrisked NAV 1352p a share (these NAV values based on long term oil price of 65 US$ per barrel)

Unrisked 1352p a share after the 50% Equinor option take up (or as we stand now 2704p a share 100% owned)

.


#22

#23

…“someones summary of JOG”…??

…mine actually, Pro_S2009…I don’t mind at all btw; glad to see JOG get some coverage, even on here. Everyone’s abandoned ship!

Not sure how far you can go back now on ii but TRAP was an interesting story and my posts go back a long way if you’re interested. The shares I bought in JOG at 8p turned out to be a good buy. As did multi buys at between 10p and about 35p Sept 15 through to about March or April 2016. I also subscribed in all the placings. Top slicing at 375p+ (it wasn’t there for long) got me a decent holding in SQZ as well, so I owe a lot to JOG. I’m presently holding more than I’ve ever held after ditching CLNR and putting 2/3rds of the proceeds into JOG (in the 60s) and the rest into SQZ at around the current price. SQZ is a long way below fair value too imv - it’s full of cash and adding a lot more daily. They’ll buy something soon but I’m not quite sure what!!

It’s nice to get a few decisions right for once. You know the value I see in JOG - it wouldn’t imv be overvalued at 5x the present price, although there’s uncertainty over how ownership of JOG’s proven resources will pan out, which I suppose will put some people off. I’d like to see commonality of ownership between the P2170 partners across the 5 GBA licences, which would hopefully get JOG to first oil without too much dilution and leave it with plenty of cash. Wdik? The directors are incredibly switched on in this regard and want to see the shares even more tightly held than they already are, I’d wager.

I’m looking forward to JOG telling an invited audience (or more) in London early in Q4 exactly what they’ve got and what they intend to do with it. One or two institutions (hopefully well informed and a bit more patient than the clowns in Schroders & L&G) buying into JOG’s story would change the dynamics and probably result in a sharp price increase that hopefully could be maintained instead of sold into by weak holders, many of whom I hope have now gone.

It must be one of the biggest anomalies in the history of the markets that JOG, with discovered and proven to flow reserves in the NS of 120mmboe, hundreds of millions of barrels prospective and £10m+ in cash has a market cap of about $45m, whilst UKOG, with the square root of f*** all, has a m/c of $65m. Tells you how uninformed most of those making up the market must be.

But we already knew that…

GL - eagle (aka dick)


#24

Hi Dick,

Yes, it is most strange. I am guessing its just the wrong time of the year (institutional holidays) and everyone is waiting for Equinor to rubber stamp the project.

Equinor farming in along with everyone back from summer holidays should see plenty of buying and perhaps then JOG will rerate upwards to more where it should be. At this moment in time should be over 500p…that it is not just represent a massive bargain.


#25

Arden Flash Update on JOG in the link below (PDF file)

http://s000.tinyupload.com/?file_id=02961162995959236408

.


#26

IC Buy rec for JOG

.


#27

#28

3 September 2019
Jersey Oil and Gas* (JOG LN) – Arden note released
Buy, Current Price: 239p Target Price: 550p

Key Points: JOG recently announced the award of substantial new assets in the UK North Sea. This note maps out the newsflow we would expect this to generate as the company moves towards development, while also laying out a series of valuation scenarios. This all well supports our Buy recommendation and 550p price target.

Significant asset additions. JOG recently announced 100% award of the Buchan oil field and Buchan Andrew, J2 and Glenn oil discoveries. These contain gross mean contingent resources of 119mmboe – a huge uplift on JOG’s existing Verbier 5mmboe net 2C position.

Buchan is development ready. Buchan is an existing field with all the required data to be redeveloped: JOG is now beginning to work on a new field development plan.

Share price not yet fully reflecting new assets. JOG shares have already made significant gains. Our modelling indicates that they are still substantially undervaluing the new asset position, however.

Way forward to help demonstrate veracity of new asset value. There are a number of waypoints over the coming months and years that should help demonstrate JOG’s asset value, including development plan submission (mid-2021), potential farm out (50% option granted to Equinor expires in Q4 2019; numerous other potential partners otherwise), completion of funding and FID, and first oil (targeted for 2024). We could also see further P2170 drilling in 2020.

Our modelling shows a wide range of potential valuations. This note includes a number of modelled scenarios for JOG’s assets, and we also look at UK North Sea transaction multiples. Our base case returns a JOG risked NAV of 597p, but our overall range runs from 292p to 2,664p.

Buy recommendation, 550p target. Going forward we expect the outcome of the Equinor option, new JOG CPRs, confirmation of the 2020 P2170 work programme, potential 2020 drilling and periodic Buchan development planning updates. This, alongside the underlying asset value, supports our Buy recommendation and 550p target.


#29

The conclusion from the new Arden note makes interesting reading. For the first time they mention potential farm out.

So the news flow to get the JOG price up to a more proper nigher value is… Equinor deal, farm out, CPR’s and p2170 update and drilling program news…all possibly in the final months of 2019 it seems. Loads of news ahead.

Conclusion

The award of Buchan,J2 and Glenn is a very substantial event for JOG, transforming asset value and the company’s activity schedule going forward. The various valuations that we have set out above show a very wide potential range, but even the lowest of all of these, at 292p, is materially above current levels. As such, we are of the view that the value of the asset awards is yet to be fully appreciated by the market.

The route to realising a greater portion of the value of JOG’s assets is also set out above, and includes progression of the development plan, potential farm out, new CPRs and clarity on the 2020/21 P2170 work programme in the coming months. This should then be followed by further development planning progress,potential P2170 drilling in 2020 and potential drilling on the new exploration assets, alongside the ever-present possibility of production acquisitions.

The substantial discount to our base case risked NAV, combined with the upcoming newsflow, supports our Buy recommendation and 550p target price.


#30

The various valuations scenarios for JOG by Arden:

.