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We don’t usually look at oil and mining stocks here at The Armchair Trader. They can be something of an esoteric market, but this is also a sector which can provide investors with some spectacular returns. We have seen this amply illustrated this week with the Jersey Oil and Gas [JOG] share price.

Who is Jersey Oil and Gas?

Jersey Oil and Gas is a junior oil company. It was rebooted out of the remains of a company called Trap Oil. The firm has until recently been talking about the benefits of acquiring and building a portfolio of producing assets. In a September statement it said it would be pursuing this strategy regardless of the outcome of other exploration endeavours.

So what is all the fuss about?

Jersey Oil and Gas owns 18% of the Verbier oil well. This is being explored by Statoil at the moment. JOG’s share price collapsed in August because it looked at the time as if Verbier would not yield much. Statoil, ever persistent, decided to drill a side track, and this week reported that it had hit oil in good quality sands. This was at a depth of slightly over 3,000 metres.

Statoil estimates that there could be anywhere between 25 and 130 million barrels of oil in this particular deposit. The Verbier oil field is located off the coast of Scotland in the North Sea. As of January, JOG’s other major stake was in the Athena field, where a number of licensees are working.

Needless to say, the news has had a positive impact on the Jersey Oil and Gas share price. At the time of writing it was 301.50, up from 61.50 at close last Friday.



So what now for Jersey Oil and Gas?

Statoil’s potential discovery still needs to be looked at further. Statoil UK this week said it was convinced of the continuing potential of the UK continental shelf. The find also has good implications for the untested Cortina and Meribel prospects.

This is a big one for Jersey Oil and Gas which has a fairly limited portfolio of assets. We will watch with interest to see what follow up analysis of the find yields.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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