NORTH Sea-focused Jersey Oil & Gas has said it is in talks with funders which are keen to help it expand in the area as the company eyes several acquisition targets.

Meanwhile oil and gas entrepreneur Algy Cluff has underlined his enthusiasm for the area after a study highlighted the commercial potential of two prospects.

Announcing results for 2016, Aim-listed Jersey Oil & Gas said it was in talks with a major bank and other funding partners, who remain keen to support the company as possible providers of capital for acquired production assets.

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Chief executive Andrew Benitz added: “ We continue to be involved in multiple sales processes and are confident that we are well placed to deliver further shareholder value through our production focused acquisition strategy.”

The update from Jersey provides further assurance that some companies are keen to invest in the North Sea in the low oil price environment and evidence that banks are rediscovering their enthusiasm for the area.

Jersey’s chairman Marcus Stanton noted: “ We have observed in the market some notable large scale asset acquisition transactions and are confident that this can be replicated by the Company at prices which yield a good return for shareholders.”

Chrysaor recently secured access to up to $2 billion (£1.56bn) debt funding after agreeing to buy a huge North Sea portfolio from Shell for up to $3.8bn.

Jersey Oil & Gas’s experience also underlines the scale of the shake up in the North Sea. Many firms have put assets up for sale amid the downturn triggered by the crude price plunge which started in 2014.

Jersey Oil & Gas said it evaluated in excess of 40 field interests in 2016, with a view to acquiring production assets.

The company sold interests in exploration prospects in the Moray Firth to Statoil and private equity-backed Azinor Catalyst last year.

The Cluff Natural Resources business run by Mr Cluff said an expert study of its Cadence and Bassett propects in the Southern North Sea indicated “robust economics for a range of development options”.

The study by the Exodus consultancy found the development of the two fields could generate a total return of £155 million.

Mr Cluff said: “This study has confirmed our long-held conviction that exploring for gas in the Southern North Sea can deliver significant value for shareholders and the UK as a whole.”

The economics of the prospects were tested against numerous potential exploration outcomes and development scenarios.

Jersey Oil & Gas cut losses to £793,439 in 2016, from £1.4 million in 2015. Mr Stanton said this reflected continuing tight control of costs, part of which involved the directors and staff agreeing to salary cuts of up to 50 per cent for nine months of the year.

He noted: “Salary levels have since been restored, although they remain low by industry norms.”

The company was formerly known as Trap Oil. It is trying to realise value from the rump of the extensive North Sea portfolio that Trap developed helped by the £30m acquisition of Banchory- based Reach Oil & Gas in 2011.

Trap Oil lost £44m in 2014 when the producing Athena oil field became significantly loss making following the fall in the oil price that year.

Andrew Benitz and Ronald Landsell took charge of Trap Oil in July 2015 after it acquired the Jersey Oil & Gas business they ran in a £500,000 deal.