Jersey Oil & Gas, a North Sea-focused firm, has agreed to a legal settlement with a Norwegian contractor to place its finances in a better position than anticipated.
After what it said was a one-off and isolated conflict, the company paid $850,000 (£625,000) to TGS-Nopec Geophysical Company ASA.
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After this payment…. the estimated cash position of the company at 31 December 2020 is approximately £ 5 million, which is approximately £ 3 million above our originally planned cash position at the end of the 2020 year,”Following this payment …., the group’s estimated cash position at 31 December 2020 is approximately £5 million, which is approximately £3 million above our originally planned 2020 year-end cash position,”
The update came on a day of renewed oil market uncertainty.
In morning trade, Brent crude prices rose in hopes that members of the Opec + group of exporters will retain supply curbs that are expected to ease in February. The price, however, went into reverse as fears about the outlook for demand were fuelled by the increase in the number of coronavirus cases around the world.
Traders may be concerned about reports of disagreement between Saudi Arabia and Russia about whether to increase production.
“While Saudi Arabia, supported by most Opec+ members, wants to keep oil production steady in February, Russia seems to have had enough this time.” noted Bjornar Tonhaugen, head of oil markets at consultancy Rystad Energy.
“Different assumptions about the impact of the vaccine on demand recovery may be at the heart of the controversial market views.”Different assumptions about the effect of the vaccine on the recovery of demand may be at the center of the controversial views of the market.
Yesterday afternoon, Brent crude sold for $51.19 a barrel, down $0.61/bbl on the day.
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In January last year, the price dropped from about $70/bbl to an 18-year low of less than $20/bbl in April. After Opec Plus members curbed development and governments around the world subsequently eased closures on the corona virus, it recovered somewhat.
In the midst of the uncertainty in the oil and gas markets created by the coronavirus crisis, companies operating in the North Sea have faced major challenges.
Jersey Oil & Gas, led by Chief Executive Andrew Benitz, hopes to draw partners to support its plans for major North Sea production. This is expected to include restarting production from the field of Buchan and getting on stream the discovery of Verbier. The fact that its cash position at the end of the year was better than anticipated has given the business more space to maneuver.
TGS Nopec had requested payments from Jersey totaling $1.05 million relating to terms connected with a contract to provide Verbier-related seismic survey results.
Jersey claimed that it denied the legitimacy of the allegations, which were followed by two trials before the Norwegian courts. A final settlement payment to TGS of $0.85 million was negotiated and accepted based on the legal advice received. Jersey stated in its announcement of first-half results in September that it had set aside £ 200,000 for the necessary payments.