Jersey Oil and Gas (JOG) has posted heavy losses in its full-year results after a “great disappointment” at its Verbier discovery in the North Sea.
Verbier, in the outer Moray Firth, was thought to hold between 25-130 million barrels of oil equivalent, but results from an appraisal well last month showed it is likely to be around the 25million mark.
Posting its full year results for 2018, JOG dropped to a £2million loss, compared to a profit of £700,000 in 2017, which reflects its interest in the Verbier licence.
The firm’s year-end cash position was £19.8million, which will drop further as it spends £4-5million in the first half of the year to settle its costs for the Verbier appraisal.
JOG restated that it considers Verbier to still be commercially viable at the lower estimate of 25million barrels, with other nearby prospects which could also be drilled.
Verbier is operated by Norwegian energy giant Equinor, with a 70% interest.
Its partners are Jersey Oil and Gas, with 18%, and Cieco V&C, with 12%.
JOG is awaiting enhanced seismic data to be delivered during the second quarter of the year to determine the potential for further appraisal and exploration wells.
Meanwhile chairman Marcus Stanton said Jersey “continues to assess” merger and acquisition opportunities but has not so far found one which will offer a strong enough return for shareholders.
CEO Andrew Benitz said the firm remains “optimistic” despite the Verbier results.
He said: “JOG continues to benefit from our initial Verbier oil discovery announced in 2017, notwithstanding the recent appraisal well results.
“We look forward to delivery of the new 3D seismic data and working with our co-venturers on assessing potential future appraisal and exploration drilling opportunities on the licence area.
“Additionally, we are excited by the potential for a new area hub catalysed by the 31st Supplementary Offshore Licensing Round and the positive impact we believe this will have for Verbier.”