Jersey Oil & Gas plc’s joint venture has secured a further 24 months to the second term of its North Sea licence P2498 to complete the field development plan for the Buchan field.
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The company estimates the Buchan field contains gross discovered oil and gas resources of approximately 70 MMboe (95% oil).
Project partners, comprising JOG with 20%, operator NEO Energy 50% and Serica Energy (UK) Ltd 30%, now have until 28 February 2027 to finalise the FDP.
The companies also continue to await clarity on “fiscal and regulatory uncertainties” in the UK’s oil and gas sector, with NEO previously slowing work.
JOG said it was focused on advancing the Buchan Horst project to approval as well as on acquisition of UK producing acquisitions to monetise its existing tax allowances of more than $100 million.
The approval process is paused for Buchan’s environmental impact assessment following the Supreme Court’s 2024 ruling on including Scope 3 emissions in development project EIAs.
The company expects revised guidance in Spring 2025 on advancing the Buchan EIA from the Offshore Petroleum Regulator for the Environment and Decommissioning.
Work is still outstanding on the Western Isles floating production, storage and offloading vessel with the longstop date having expired at the end of February.
Given the slowdown on Buchan, the project partners and 77% FPSO owner Dana Petroleum (E&P) Ltd have retained their agreement and are in talks to accommodate the delays.
Dana has completed the majority of the inspection, verification and pre-transfer work to satisfy the main technical requirements of the sale and purchase agreement.
NEO retains a 23% ownership of the vessel.
JOG’s total cash running cost of the business has decreased by approximately 50% to £1.5m due to the slowdown in the project.
The company’s total cash at the end of 2024 was approximately £12.3m. A further $20m cash is payable under the Buchan farm-out agreements after regulatory approval of, among other matters, the FDP.
JOG has a 20% carried interest to first oil.