Jersey Oil and Gas (LSE:JOG) fell over 10% today on news that the drilling of the Verbier appraisal well is now expected to take place mid to late Q4 2018rather than the previous estimate of late Q3 to early Q4 2018.
Today’s drop could well be overdone, after all we are potentially talking about a two-month delay. As the RNS states this morning, Verbier will now be the third well in the drilling campaign instead of the first – the overall campaign will still cover the same time period. Jersey also advises that the delay is not expected to result in any changes in the well budget.
Chart-wise, the price dipped to hit a major support line formed from the lows of the past 7 months (red dashed line). The price also stayed within the short term downward channel (shaded purple).
There is strong support around 180p which also coincides with the bottom of a longer-term price channel. With interest, still very strong in Jersey, and excitement around Verbier likely to intensify, this could offer a great opportunity to get in below the previous fundraise level of 200p. I don’t see any reason for this to break the 180p support level, but of course, anything can happen!