Can exploration make a comeback after North Sea oil discovery?
Excitement continues to build at North Sea oil explorer Jersey Oil & Gas (JOG:AIM) after a well on its 18%-owned Verbier prospect identified up to 130m barrels of oil.
Drilled with Norwegian operator Statoil, this side-track well involved re-entering a previously unsuccessful well from its surface location but then changing direction to target a different area of the sub-surface.
Preliminary results suggest the find could contain anywhere between 25m and 130m barrels of oil and the result could reignite investor interest in exploration stocks both in the North Sea and further afield.
Over-capacity of drilling rigs has brought exploration costs down considerably. The chief executive of Eco Atlantic Oil & Gas (ECO:AIM) Gil Hozman tells Shares he hopes this will mean activity on its Orinduik block offshore Guyana will be accelerated, though the pace will ultimately be dictated by Tullow Oil (TLW) which has a 60% stake and is the operator.
There has been considerable excitement offshore Guyana thanks to ExxonMobil’s multi-billion barrel Liza discovery in 2015 which lies 6.5 kilometres from Orinduik.
Eco Atlantic recently inked an option agreement with Total on the block which could see the French oil major take a 25% stake, leaving Eco with 15%. In return Total will pay up to $13.5m which should fund Eco’s share of two wells on Orinduik.
Total has four months to study recently acquired seismic data before committing and Hozman says on the current timetable that would imply a decision in April 2018. In the interim he says there is likely to be near-term news flow affecting its assets offshore Namibia.