TIDMDELT
RNS Number : 6981F
Deltic Energy PLC
12 July 2023
12 July 2023
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 which forms part of
domestic UK law pursuant to the European Union (Withdrawal) Act
2018 ("UK MAR"). With the publication of this announcement via a
Regulatory Information Service, this inside information is now
considered to be in the public domain.
Deltic Energy Plc ("Deltic" or "the Company")
Significant increase in Pensacola Resource Estimate
Deltic Energy Plc today announces a significant increase in its
estimate of oil and gas resources for the Pensacola discovery on
Licence P2252 (Deltic WI: 30%). This increase, based on Deltic's
post well analysis, is nearly double initial expectations.
Highlights
-- Following post well analysis, Deltic now estimates the
Pensacola structure to contain gross P50 initially in place volumes
of gas and oil of 342 million barrels of oil equivalent.
-- This analysis indicates Pensacola may contain almost double
the volume of recoverable gas and oil than originally thought, with
Deltic now estimating total gross P50 Estimated Ultimate Recovery
('EUR') of c.99mmboe, up from 50mmboe immediately after well
completion.
-- Significantly, Deltic now estimates Pensacola contains
material volumes of oil, representing c. 30% of the combined
recoverable hydrocarbons.
-- Work is progressing with partners to develop the appraisal
and development programme for Pensacola with an appraisal well
continued to be targeted for late 2024.
-- Deltic is pursuing monetisation options for the discovery in line with its strategy.
Graham Swindells, Chief Executive of Deltic Energy,
commented:
"The Pensacola oil and gas discovery is transformational for
Deltic. Well data indicates that Pensacola contains close to double
our original estimate, representing one of the most significant
discoveries in the North Sea in many years."
"This is an outstanding result for Deltic. Our success to date
reinforces the quality of our technical team and the Deltic model
of taking licences from award through to successful drilling."
"We look forward to working with our JV partners to continue
moving this exciting asset through the appraisal phase and onward
towards development. With the significant additions to our resource
base, we will also continue to pursue monetisation options in line
with our stated strategy."
Volumetric Update - Oil and Gas Initially in Place
Deltic has updated its volumetric assessment of the Pensacola
discovery based on data collected from the 41/05a-2 well and the
results of lab testing. This represents a significant increase in
estimated initially in-place gas and oil volumes, as set out
below:
PENSACOLA DISCOVERY - Oil and Gas Initially in Place
(gross, Deltic WI: 30%)
Hydrocarbon Units P90 P50 P10
Type
--------------- ------- ------ ------
Gas BCF 312 459 652
--------------- ------- ------ ------
Oil MMBO 87 243 485
--------------- ------- ------ ------
Associated
Gas* BCF 40 136 340
--------------- ------- ------ ------
COMBINED
TOTAL MMBOE** 148 342 650
--------------- ------- ------ ------
*Associated gas is gas dissolved within the oil deposit
** Gas is converted at 5.98 BCF to 1 MMBOE
Licence P2252 which contains the Pensacola discovery is operated
by Shell
While the expected presence of oil in the south of the prospect
represents highly material upside, the discovered gas volumes in
the northern part of the Pensacola prospect are better constrained
and therefore the gas is still likely to be the initial focus of
near-term appraisal and development activity.
Preliminary Development Plan and Recoverable Oil and Gas
Volumes
Based on preliminary reservoir engineering work completed by
Deltic, a range of potential development scenarios have been
assessed to allow an estimation of recoverable volumes which could
be produced from the Pensacola discovery. In all of these scenarios
it has been assumed that hydrocarbons will be exported via a new
offshore installation and pipeline to Teesside. Based on these
scenarios Deltic estimates the range of potentially recoverable oil
and gas associated with the Pensacola discovery as follows:
PENSACOLA DISCOVERY - EUR (gross, Deltic
WI: 30%)
Hydrocarbon Units P90 P50 P10
Type
----------- ----- ----- -----
Gas BCF 198 320 499
----------- ----- ----- -----
Oil MMBO 11 30 67
----------- ----- ----- -----
Associated
gas BCF 24 95 272
----------- ----- ----- -----
COMBINED
TOTAL MMBOE* 48 99 196
----------- ----- ----- -----
* Gas is converted at 5.98 BCF to 1 MMBOE
Licence P2252 which contains the Pensacola discovery is operated
by Shell
Post Well Analysis
Interpretation work by the JV team following the post-well
analytical programme has reinforced the conclusion that thicker and
better quality Hauptdolomite reservoir is present across the crest
of the Pensacola Reef, which will be targeted in future appraisal
and development drilling.
The Hauptdolomite cores collected at the well location have an
average porosity of 18.8% with a maximum permeability of 40mD
(average of 6mD), better than the reservoir quality initially
estimated from wireline logs. Dynamic reservoir modelling by Deltic
indicates that the reservoir quality encountered at the well
location would support commercial flow rates from horizontal wells,
without requiring any improvement in reservoir quality up-dip.
Next Steps
Deltic continues to work closely with the Licence Operator and
our JV partners to develop the appraisal programme for the
Pensacola discovery. Subject to JV and other regulatory approvals,
the drilling of an appraisal well on Pensacola is continued to be
targeted for late 2024. In parallel, the JV will undertake various
studies to define optimal development plans for the Pensacola
discovery.
In line with the Company's stated strategy, Deltic has also
commenced a formal process to pursue the value crystallisation
options that exist for the Pensacola discovery which may involve
monetisation and/or farm down of its equity interest in the
Pensacola discovery.
Qualified Person's Statement:
Andrew Nunn, a Chartered Geologist and Chief Operating Officer
of Deltic, is a "Qualified Person" in accordance with the AIM
Guidance Note for Mining, Oil and Gas Companies, June 2009 as
updated 21 July 2019, of the London Stock Exchange. Andrew has
reviewed and approved the information contained within this
announcement.
Standard
Estimates of resources have been prepared in accordance with the
PRMS as the standard for classification and reporting.
Glossary of Technical Terms
Associated Gas: Associated Gas is a natural
gas found in contact with or
dissolved in crude oil in the
reservoir
BCF: Billion Cubic Feet
---------------------------------------
Estimated Ultimate Recovery Estimated Ultimate Recovery
or EUR: is defined as those quantities
of petroleum which are estimated,
on a given date, to be potentially
recoverable from an accumulation,
plus those quantities already
produced therefrom
---------------------------------------
Gas Initially in Place: The quantity of gas that is
estimated to exist originally
in naturally occurring accumulations
before any extraction or production
---------------------------------------
m D: A millidarcy ( mD ) is one thousandth
of a darcy a nd a standard unit
of measure of permeability
---------------------------------------
MMBO: Million Barrels of Oil
---------------------------------------
MMBOE or million barrels of million barrels of oil equivalent.
oil equivalent: Gas is converted at 5.98 BCF
to 1 MMBOE
---------------------------------------
Oil Initially in Place: The quantity of oil that is
estimated to exist originally
in naturally occurring accumulations
before any extraction or production
---------------------------------------
P90 resource: reflects a volume estimate that,
assuming the accumulation is
developed, there is a 90% probability
that the quantities actually
recovered will equal or exceed
the estimate. This is therefore
a low estimate of resource
---------------------------------------
P50 resource: reflects a volume estimate that,
assuming the accumulation is
developed, there is a 50% probability
that the quantities actually
recovered will equal or exceed
the estimate. This is therefore
a median or best case estimate
of resource
---------------------------------------
P10 resource: Reflects a volume estimate that,
assuming the accumulation is
developed, there is a 10% probability
that the quantities actually
recovered will equal or exceed
the estimate. This is therefore
a high estimate of resource
---------------------------------------
PRMS: the June 2018 Society of Petroleum
Engineers ("SPE") Petroleum
Resources Management System
---------------------------------------
WI: Working Interest
---------------------------------------
**ENDS**
For further information please contact the following:
Deltic Energy Plc Tel: +44 (0) 20 7887
2630
Graham Swindells / Andrew Nunn / Sarah McLeod
Allenby Capital Limited (Nominated Adviser) Tel: +44 (0) 20 3328
5656
David Hart / Alex Brearley (Corporate Finance)
Stifel Nicolaus Europe Limited (Joint Broker) Tel: +44 (0) 20 7710
7600
Callum Stewart / Simon Mensley / Ashton
Clanfield
Canaccord Genuity Limited (Joint Broker) Tel: +44 (0) 20 7523
Adam James / Gordon Hamilton 8000
Vigo Consulting (IR Adviser) Tel: +44 (0) 20 7390
0230
Patrick d'Ancona / Finlay Thomson / Kendall
Hill
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END
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