Jersey Oil & Gas (JOG) has signed an agreement to acquire Equinor UK’s 70% operated interest in licence P2170 in the central North Sea.

Covering blocks 20 / 5b and 21 / 1d, the P2170 concession includes the Verbier oil discovery.

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Discovered in 2017, Verbier lies 100km north-east of Aberdeen, UK.

Equinor will receive $3m from JOG if the UK’s Oil and Gas Authority (OGA) approves the field development plan (FDP). It will receive a further $5m when it extracts the first oil.

JOG will also make royalty payments on the first 35 million barrels of oil produced from the well.

The deal increases JOG’s discovered resources in the Greater Buchan Area (GBA). It will increase by 17.5 million barrels of oil equivalent (Mboe) to 142Mboe.

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It also adds an estimated $506m of post-tax cash flow. This takes the GBA development estimate of post-tax cash flow to $3.17bn for JOG.

Jersey Oil & Gas CEO Andrew Benitz said: “Acquiring further discovered oil volumes enhances JOG’s project value considerably and at the same time strengthens our plan to bring Verbier into future production through the GBA development, which is a truly exciting opportunity to showcase what is possible with new developments in the UKCS.

“We are now well placed to progress our development plans through Concept Select, before launching a farm-out process to attract industry partners to join us in unlocking the significant value that exists within the Greater Buchan Area.”

In April, Equinor finished drilling at the Verbier discovery, with the appraisal well failing to discover expected oil reserves.