A North Sea-focused upstream oil and gas company has reached a settlement to a legal dispute with a Norwegian contractor.
Under the agreement, TGS-Nopec Geophysical Company (TGS) claimed uplift payments from Jersey Oil and Gas totalling $1.05m in respect of licence awards to Jersey Petroleum in the Oil & Gas Authority’s 31st Supplementary Offshore Licensing Round; and the acquisition of Equinor UK’s 70% interest in a license.
Jersey Oil and Gas disputed the validity of both claims, following which two hearings took place in the Norwegian courts.
On the basis of legal advice received, the company negotiated and agreed a final settlement payment to TGS of $850,000.
Following this payment, which settled what it described as “a one-off and isolated dispute”, the group’s estimated cash position at 31 December was circa £5m, which is around £3m ahead of initial 2020 budgeted year-end cash balance.
The update followed renewed volatility on oil markets, with the Brent crude price initially rising yesterday amid hopes that members of the Opec group would maintain curbs on production which are due to be eased in February.
However, the price fell as a surge in the number of global coronavirus cases raised concerns about the outlook for demand.
Reports of disagreement between Saudi Arabia and Russia about whether output should be increased may have also worried traders.
Jersey Oil and Gas holds a significant positions within the central North Sea, referred to as the Greater Buchan Area, including working interests in blocks that contain the Buchan oil field and J2 and Glenn oil discoveries.
The company’s acreage is estimated by management to contain more than 140 million barrels of oil equivalent of discovered mean recoverable resources, in addition to significant exploration upside potential, which includes four drill-ready prospects.