H1 2025: cash conserved, costs cut, Buchan ticking over
Jersey Oil & Gas (AIM: JOG) has released unaudited interim results for the six months to 30 June 2025. The headline is simple: the balance sheet looks solid while the Buchan redevelopment edges forward through a choppy policy backdrop.
Cash and term deposits totalled £11.3 million at period end with no debt, and the annualised running cost of the business has been cut by around 50% to an expected £1.5 million. Administrative expenses fell to £938,553 versus £2,791,954 in H1 2024, driving a much smaller loss before tax of £697,258 (H1 2024: £2,622,152). Basic and diluted loss per share was 2.13p.
Key numbers investors should note
| Metric | H1 2025 |
|---|---|
| Cash & cash equivalents | £834,777 |
| Term deposits | £10,500,000 |
| Total cash resources | £11.3 million |
| Administrative expenses | £938,553 |
| Loss before tax | £697,258 |
| Expected annualised running cost | £1.5 million |
| Intangible assets (E&D) | £11,795,976 |
| Debt | None |
| Shares outstanding (avg.) | 32,667,627 |
| EPS (basic and diluted) | (2.13)p |
Buchan redevelopment: what progressed and what still needs doing
JOG holds 20% interests in licences P2498 and P2170 in the UK Central North Sea, the “Greater Buchan Area” containing the Buchan Horst oil field, J2 discovery and Verbier discovery. The project slowed in 2024 amid regulatory and fiscal consultations, but several pre-sanction workstreams continued in H1 2025:
- Further subsurface modelling studies.
- Specification of the optimal drilling completion plan for the production wells.
- Commercial terms agreed for utilising gas export infrastructure.
Buchan’s Environmental Impact Assessment (EIA) now needs an addendum to include “Scope 3” emissions (emissions from end-use of the product) following new guidance from OPRED – the Offshore Petroleum Regulator for the Environment and Decommissioning.
The JV – Operator NEO NEXT Energy, Serica Energy and JOG – lists the remaining steps to reach Field Development Plan (FDP) approval as:
- Reactivating and completing tenders for drilling, subsea and FPSO modification scopes (FPSO is a floating production, storage and offloading vessel).
- Re-contracting an FPSO.
- Submitting the updated EIA that includes Scope 3 forecasting.
- Finalising the FDP and securing North Sea Transition Authority (NSTA) approval.
Assuming a constructive outcome to government consultations, FDP approval is “likely” to be targeted during 2026. The Second Term of the Buchan P2498 licence has been extended by 24 months to 28 February 2027, giving breathing room to complete approvals.
Western Isles FPSO: where things stand
The agreement to acquire the Western Isles FPSO was terminated by Dana Petroleum in March 2025 after the longstop date passed. However, the door is not closed. NEO (the Buchan Operator) owns 23% of the FPSO and the partners say recontracting remains possible at the appropriate time. The vessel is currently anchored in Scapa Flow.
Funding and carry: why JOG can bide its time
JOG’s 20% share of Buchan project expenditure is fully carried by its joint venture partners based on the approved FDP budget. In simple terms, a “carry” is when partners pick up your share of project costs. On top, JOG is due a further $20 million in cash after FDP approval and the associated consents are received.
Internally, the company has cut costs hard to conserve capital. Total annualised running cost is expected at £1.5 million, helped by a 50% reduction in staff and Directors’ salaries. With £11.3 million of cash resources and no debt, the going concern statement asserts headroom for at least 12 months even if Buchan were to stall and farm-out instalments were not realised.
Regulatory and fiscal backdrop: the biggest swing factor
Three government consultations since July 2024 have shaped the period: Scope 3 in EIAs, licensing policy, and the long-term fiscal regime. Guidance for EIAs has now been issued, enabling activity to resume once addenda are submitted. The big unknown is the fiscal framework.
The Energy Profits Levy (EPL) taxes North Sea profits at 78%. Government is considering alternative pricing mechanisms that would apply a windfall tax above certain commodity price thresholds, but crucial details – the trigger prices and tax rate – are not disclosed. JOG is lobbying for clarity in the Autumn Statement and for the EPL to be replaced earlier than its current 2030 sunset.
Why it matters: the fiscal outcome will dictate whether the JV can sanction Buchan. The company’s language is clear – project progression hinges on taxation clarity.
Management’s view and my take
What management said
- They have “positioned the Company to withstand” uncertainty by halving the cost base and maintaining cash.
- Buchan is positioned as a strategic UK project, potentially ~70 Mmboe, ~£1 billion of investment, 1,000+ jobs and “hundreds of millions” in tax to the Exchequer.
- They want the government to remove the EPL and finalise the new regime.
My read of the results
- Positives: strong cash for a pre-production company, no debt, costs materially down, licence term extended to February 2027, gas export commercial terms agreed, and a full carry to first oil based on the approved FDP budget plus a $20 million cash milestone on FDP approval.
- Negatives: the Western Isles FPSO agreement falling away pushes procurement risk back onto the critical path; there is still no FDP timeline until fiscal clarity emerges; and, as ever, there is no revenue to offset costs.
- Balance: JOG has done what it can in-house – conserve cash and keep technical/commercial work moving. The near-term destiny sits with Westminster and OPRED.
Risks to keep in mind
- Policy risk: the shape and timing of the post-EPL fiscal regime are not disclosed.
- Project execution: re-tendering, re-contracting an FPSO and value engineering will all need to line up to hit a 2026 FDP target.
- Commodity price sensitivity: thresholds for any future windfall mechanism are unknown.
- Partner alignment: Buchan is a joint venture; timing and budgets will reflect JV consensus.
Potential catalysts for JOG shares
- Autumn Statement clarity on the fiscal regime for North Sea projects.
- Submission of the EIA addendum including Scope 3 and subsequent regulatory feedback from OPRED.
- Re-contracting of an FPSO solution for Buchan.
- JV confirmation of tendering outcomes and capex optimisation.
- FDP submission and, in a constructive scenario, approval during 2026.
- Any producing asset acquisition that utilises JOG’s UK tax allowances (the company references “over $100 million” of tax allowances) and brings earlier cash flow.
Bottom line: set up for a policy-driven 12 months
This is a tidy set of interims for a pre-sanction developer. Cash of £11.3 million, a halved cost base and a fully carried 20% stake provide resilience. The operational to-do list is clear, and the licence extension de-risks timing.
The swing factor is external: the replacement for the 78% EPL and how it will bite at given oil and gas prices. If the Autumn Statement delivers investable clarity, Buchan can re-accelerate with FDP approval targeted in 2026. Until then, JOG’s job is to stay lean and ready – and they look to be doing exactly that.
