Jersey Oil & Gas (JOG) said a North Sea sidetrack was “unlikely” after disappointing drilling results.
The North Sea newcomer reported its Verbier prospect, which it owns a 18% stake in, has been safely drilled, reaching the planned target Total Depth of 4,267m on 10 September 2017.
The Statoil-operated well encountered water bearing Upper Jurassic sands, deeper than anticipated.
A decision on whether to drill a sidetrack will be taken after evaluation of wireline logs.
However an official report read, “at this stage JOG considers this to be unlikely”.
In the event a sidetrack is not drilled, the well will be plugged and abandoned.
Chief executive Andrew Benitz said: “We are naturally disappointed by these results, but remain in a strong position to continue to pursue our core strategy of growth through potential production asset acquisitions.
“In light of the Verbier result, the company will now update its evaluation of the P.2170 licence acreage and consider the possible implications for the Cortina prospect, which remains an independent and prospective Upper Jurassic target.”
This well was drilled with ultimately no cost exposure to JOG. The board estimates that the company’s cash position at the end of 30 September 2017, taking into account both existing cash reserves and funds due from the company’s carry arrangements in respect of the Verbier well, will be approximately £2.5m.