Jersey Oil & Gas PLC on Friday said that it has agreed the acquisition of the Western Isles floating production, storage and offloading vessel alongside its other Buchan field partners.

Jersey Oil & Gas is an upstream oil and gas company focused on the UK Continental Shelf region of the North Sea.

Shares in the company were up 12% to 213.86 pence each in London on Friday morning.

Western Isles, which is currently operating in the North Sea, has been operational since 2017. As of Friday, Jersey Oil and Neo Energy, another full-cycle North Sea operator in the UK Continental Shelf, have executed agreements to buy the vessel.

In July, Jersey Oil said that it would ideally redevelop the Greater Buchan Area via the redeployment of an FPSO. It explained that this solution would allow it to reuse existing infrastructure, and with limited modifications, make the FPSO electrification-ready upon its redeployment.

Following the Western Isles acquisition, Jersey Oil will receive a further cash payment from Neo Energy of $9.4 million, associated with the finalisation of its Greater Buchan Area development solution.

Further to the farm-out transaction completed with Neo earlier this year, Jersey Oil has a 50% working interest in the Greater Buchan Area licences. Through expenditure carry arrangements, Jersey is being fully carried for its 50% share of the estimated $25 million cost to take the Buchan field through to approval stage. It will also be carried for 13% of the Buchan field re-development costs.

Looking ahead, there are plans are for a ‘relatively modest’ work programme once the vessel has been handed to Neo, in its capacity as field operator. The first phase of the programme involves re-development of the Buchan field, with production start-up targeted for late 2026.

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