WTI (Oct) $63.97 -$1.62, Brent (Nov) $67.60 -$1.54, Diff -$3.63 -18c
USNG (Oct) $3.06 +5c, UKNG (Oct) 78.45p +0.32p, TTF (Oct) €31.865 +€0.04

Oil price

Oil has drifted again today, my comments yesterday regarding a potential increase in production from Opec, as reported by Reuters, appears to still be in investors minds. The API stats were a bit mixed, crude was expected to draw 3.4m barrels but actually added 622/- but gasoline drew a big 4.577m right at the end of the driving season indicating a busy Labor Day weekend. 

Jersey Oil & Gas

Jersey Oil & Gas has announced its unaudited Interim Results for the six month period ended 30 June 2025.  

Highlights & Outlook

• Significant engagement undertaken with the UK government and industry bodies concerning the regulatory and fiscal consultations that will impact the long-term direction of the UK North Sea oil and gas industry
• Work underway to prepare the necessary addendum to the Buchan Horst (“Buchan”) Environmental Impact Assessment resulting from the revised guidance issued by the Offshore Petroleum Regulator for the Environment and Decommissioning regarding the inclusion of Scope 3 emissions
• Continued progress made with a number of pre-sanction technical and commercial workstreams, including subsurface modelling studies, the specification of the optimal drilling completion plan for the requisite production wells and the agreement of commercial terms for the utilisation of gas export infrastructure
• While the agreement to acquire the “Western Isles” floating production, storage and offloading (“FPSO”) vessel was terminated by Dana Petroleum after reaching its longstop date in March 2025, the possibility remains to recontract the vessel at an appropriate time, with NEO NEXT Energy remaining a 23% owner of the FPSO vessel
• Second Term of the Buchan P2498 licence extended by 24 months to 28 February 2027.  The extension was requested to provide JOG and its joint venture partners with the time required to finalise the Buchan Field Development Plan
• Solid financial position, with cash at the end of H1-2025 of £11.3 million and the total annualised running cost of the business reduced by approximately 50% to an expected £1.5 million 

Andrew Benitz, CEO of Jersey Oil & Gas, commented:
“Against a challenging backdrop where the North Sea oil and gas industry has been unnecessarily damaged by the 78% EPL tax rate, we have positioned the Company to withstand the on-going fiscal and regulatory uncertainty by halving the cost base and maintaining a strong cash position.

We hold an interest in a potentially incredible prize in the form of our carried interest to first oil on the Buchan redevelopment project.  This has the potential to unlock significant UK investment, create over 1,000 well paid jobs and ultimately realise hundreds of millions in future tax payments to the exchequer.  We urge the government to complete its consultation process on the future fiscal regime and remove the EPL in order to establish a playing field that facilitates future investments.  Homegrown energy should be prioritised over more carbon intensive energy imports and with Buchan, we have a great opportunity to be at the forefront of championing a fully integrated production hub that aligns with the industry’s decarbonisation strategy.”

The situation at the GBA project is still busy, operationally it is hard at work on the Scope 3 emissions submissions after the debacle created by the Government. The company is also progressing a number of pre-sanction technical and commercial workstreams and subsurface studies for its drilling plans required for production wells and also for the utilisation of gas export infrastructure.

Jersey has also worked hard on its costs and has ‘positioned the Company to withstand the on-going fiscal and regulatory uncertainty by halving the cost base and maintaining a strong cash position’. This solid financial situation shows cash of £11.3m and with the cost cutting having brought running costs down by c.50% to an expected £1.5m. 

This means that with a combination of reduced costs and ample cash resources, the JOG management has ensured that the company can withstand the outrageous political headwinds that have meant that whilst fiscal policy is farcical, the company can remain ready to deliver as and when it gets the go-ahead.

And I don’t think that developments in the UKCS are dead and buried, we know that Jackdaw is imminent and Ithaca have said that Rosebank should be ready in early 2026, to me this means that the GBA should get the go-ahead. It is after all a huge project, will provide meaningful domestic production and make ‘hundreds of millions of future tax payments to the Exchequer’  at a time when high carbon, expensive, imported hydrocarbons are unnecessarily on the rise.

At a time when tax is very much in the centre of public discussion, the ability to set aside net zero dogma and be able to receive money in No 11 as well as keep going a valuable, highly motivated workforce in a genuinely international industry that is well respected should be a reason for supporting Jersey, Buchan and the UK oil and gas industry.

The Jersey share price has been looking forward to a positive change to the UK with its decarbonisation strategy and is up 70% on a year and over 100% in the last six months, this is totally justified and I still claim that the potential upside for the company is substantial. 

Original article   l   KeyFacts Energy Industry Directory: Malcy's Blog