Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
magazineJersey milking North Sea opportunity
Play momentum in £12.4m small cap oil explorer Jersey Oil & Gas (JOG:AIM) at 147.2p ahead of drilling at the Verbier well on its P2170 licence in the North Sea.
The drilling effort is backed by Norway’s Statoil (STLO:STO) after a farm-out (Jersey retains an 18% working interest). The licence operator has formally communicated to the UK Oil & Gas Authority its intention to drill in 2017. A £1.6m placing (30 Nov) means Jersey’s share of the costs are now fully covered.
Asset manager Toscafund, known for its activist investing, has a position through Toscafund Micro Cap (IE00B68Z1V62) and noted in October that Verbier has a unrisked value to Jersey of £10 per share. The fact Statoil is choosing to drill this prospect in the near-term, despite restrictions on capital spending, implies confidence in its potential.
Jersey is also sitting on tax losses of £24m. It plans to take advantage of the majors scaling back their portfolios and financially distressed peers being forced to sell to pick up producing assets against which it can offset these losses.
There could be further upside to come as we move towards the drilling of this key well. Buy at 147.2p.
Important information:
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.