Tuesday 23 August 2016 5:48 pm

Statoil brought in to North Sea venture by Jersey Oil & Gas

Norwegian oil major Statoil has picked up a 70 per cent stake in one of Jersey Oil & Gas and CEICO's North Sea licences. 

Statoil will pay a $2m (£1.5m) up-front cash payment and spend up to $25m to drill a well in the area as part of the deal. 

The licenced area contains two medium-risk oil prospects with an estimated 300m and 212m oil barrel equivalent resources respectively.

Read more: Europa Oil & Gas finds up to 600m barrels of oil off Irish coast

Drilling is expected to begin next year. 

Jersey Oil and CEICO currently own 60 per cent and 40 per cent respectively of the licence in question though once the deal is complete Statoil will become the operator while Jersey Oil will hold an 18 per cent stake and CEICO a 12 per cent stake.

Andrew Benitz, chief executive of Jersey Oil & Gas, said:

We are delighted to have secured a farm-out partner of the calibre of Statoil. This farm-out deal exposes our shareholders to 18 per cent of a prospect with significant potential and a carry in respect of the costs of the budgeted Exploration Well.

Individual prospects of this materiality are increasingly rare in the North Sea and to have a leading international operator such as Statoil joining our partnership group, serves to demonstrate the significant value-potential of this asset.

Meanwhile, oil prices flipped to gains this afternoon following losses earlier in the day. 

Read more: The World Bank has hiked its 2016 forecast for oil again

Stronger export data from China and Gulf states earlier in the week had dragged Brent crude from highs of over $50 though reports that Iran may cooperate with other global exporters to stabilise production and prices bolstered the market.